Bitcoin (BTC) may be nearing a market bottom, and a macro model linked to US and Chinese 10-year bond yields is pointing to a possible rally to $100,000 in the coming months.
Key considerations:
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Bitcoin sharks are showing signs of rallying near the 2023 market low.
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BTC holds key long-term support while being “oversold” and the possibility of a recovery is increasing.
History rhymes? BTC flashes the “exact” cross
The model shared by the AO analyst applies the Stochastic RSI oscillator to the US10Y and CN10Y products.
When overlaid with Bitcoin’s historical price action, this indicator shows that bullish crossovers from oversold levels have historically occurred near the bottom of the BTC market.
For example, in 2013, the crossover was preceded by an 8,700% increase in the price of Bitcoin. Similar signals appeared before the bull run of 2017 (+1,900%), the period of 2020â2021 (+600%) and the return of 2023 (+350%+).
According to analyst Crypto Rand, in March, the Stoch RSI produced another “very precise” crossover, which he said signaled that Bitcoin was “going much higher.”
Shark behavior supports the case for Bitcoin’s bottom
Onchain Bitcoin whale tracking data supports the macro perspective discussed above.
For example, Bitcoin wallets holding between 1,000 and 10,000 BTC have resumed rallying after the recent price drop, similar to the behavior seen near the bottom of the market.
For example, the same group started buying in early 2023 near the lowest prices before Bitcoin increased by more than 350%.
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Similar periods of accumulation by large holders also occurred before the 2017 and 2020 bull runs. This set-up could make Bitcoin more likely to fall than some analysts have predicted.
BTC technicians point to a return to $100,000
Bitcoin’s weekly chart is also showing early signs of a possible recovery.
Over the past month, the bears have failed to push BTC decisively below its 100-week simple moving average (100-week SMA, blue line), a level that has often marked the bottom of the price in past periods.
After testing this support line in March 2020, Bitcoin surged more than 1,000%, while a similar jump in 2019 saw gains of over 300%.
In addition, BTC’s relative strength index (RSI) fell into oversold territory below 30, suggesting that the price has fallen too quickly and too low, and the possibility of a recovery is increasing.
A decisive retracement of the 200-week SMA could send the price of BTC towards $100,000 by August, where the 50-week SMA and 1.618 Fibonacci levels will converge.
Conversely, some analysts have warned of a potential bull trap if Bitcoin fails to break above the $78,000 resistance level, which is key to an uptrend reversal.
Below the spot price, areas of interest include the 200-week exponential moving average at $68,300 and the $60,000-$65,500 support zone.
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