BTC price metric which cued biggest Bitcoin bull runs brakes out at $23K

Published at: Feb. 8, 2023

A little-known Bitcoin (BTC) price metric has just given a new bull run signal — and it has never been wrong.

As noted on Feb. 8 by Caleb Franzen, senior market analyst at Cubic Analytics, the Williams %R oscillator has left its bottom zone for the first time since May 2022.

Analyst: Oscillator crossover is "great sign"

Bitcoin gaining 40% in January and continuing to hold higher levels has produced breakout signals across various on-chain indicators.

Some analysts are cautious, opting to wait and see if the improved conditions last, but for Franzen, the data coming from the Williams %R oscillator is of particular interest.

Williams %R is a momentum oscillator that measures how near BTC/USD is to its recent highs or lows. Momentum oscillators are utilized to measure the strength of a price trend, and Bitcoin’s January performance has made it a prime test case.

“Bitcoin's 12-month Williams%R oscillator left the ‘oversold’ threshold as of January's monthly close!” Franzen wrote in part of a dedicated Twitter thread.

“Historically, leaving the lower-bound has signaled two things: 1. The cycle lows are in. 2. The bear market is over.”

He added that the phenomenon was a “great sign” while acknowledging that a bull run was not guaranteed.

An accompanying chart nonetheless showed the tight relationship between such Williams %R threshold crosses and subsequent long-term BTC price behavior.

The last, for example, came in April 2019, with BTC/USD then beginning its journey out of its bear market lows to ultimately hit all-time highs in November 2021.

A “caveat,” meanwhile, comes in the form of varying timeframes for Williams %R. Franzen noted that only the 12-month iteration of the metric had flipped bullish, with the 18-month version remaining “oversold.”

“If/when this crosses > oversold, it will add to the bull case,” he added.

Signs of Bitcoin rebirth come thick and fast

Franzen is far from alone in keeping the faith when it comes to current BTC price action.

At the weekend, popular trader Credible Crypto described the status quo as "identical" to Bitcoin's late-2020 breakout that saw it cross its prior all-time high from 2017.

Encouraging signs have also come from macroeconomic sources, notably the United States Federal Reserve, as well as internal phenomena such as the long-awaited "golden cross" event on the daily chart.

January meanwhile saw a renewed influx of institutional cash into Bitcoin, which took the majority of resources as investors shied away from many altcoin products. Weekly inflows for the last week of the month were the highest in seven months.

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