On Monday, the Bitcoin price spiked out of nowhere, reclaiming $8,350 in a jaw-dropping 6% rally after a precipitous drop to $7,800. While the bullish price action has decisively ended, with BTC falling back to $8,100 as of the time of writing this, indicators abound have shown that cryptocurrencies may continue to recover in the coming days and weeks.
The most notable of these is Santiment’s social volume indicator, which tracks social media mentions of Bitcoin over time.
In a tweet published Tuesday, the cryptocurrency data provider pointed out that social volume for the leading cryptocurrency “[has] continu[ed] its quiet decline after hitting a recent two-year low.” Indeed, BitInfo recently noted that the use of the “Bitcoin” hashtag fell to a three-year low after peaking earlier this year during the pseudo-bull run in May/June.
While many see this as a sign that Bitcoin will only fall further, even further than 40% from the year-to-date top of $14,000, Santiment argues that this can be interpreted as bullish. They wrote that historically, “low social volume has preceded large price upswings and bull runs, and high social volume has been [a] fairly reliable top indicator.”
#Bitcoin $BTC‘s social volume continues its quiet decline after hitting its recent 2-year low. Historically, low social volume has preceded large price upswings and bull runs, and high social volume has been fairly reliable as a top indicator. https://t.co/4kl8hsb9Pk pic.twitter.com/z84qpJpk79
— Santiment (@santimentfeed) October 8, 2019
While Santiment’s social indicators have clear historical precedence in their implications, is their other evidence, in terms of technicals and fundamentals, to back the idea that the Bitcoin price may soon surge higher?
Interestingly, there are.
Bitcoin Price Ready to Mount Higher
Analyst Chonis recently pointed out to his followers that Bitcoin’s one-day Moving Average Convergence Divergence (MACD) — a lagging trend indicator that some analysts say is a good way to decipher market directionality — has “poked its head above zero for the first time in almost three weeks.”
$BTC – MACD poking its head above the ZERO line for the first time in almost 3 weeks, with a bull cross on very low indicators compared to where they were the last time red to green flipped. pic.twitter.com/5Py7wOD4NT
— Big ChonisFlux Trading Group (@BigChonis) October 9, 2019
This isn’t the only positive sign. Financial Survivalism noted that Bitcoin’s chart from the last week of September until now is eerily reminiscent of the textbook Wyckoff Accumulation pattern that technical analysis legend Richard Wyckoff identified in his studies. Survivalism argued that if “this current pullback (referencing the fall from $8,350 to $8,100) creates a higher low above $8,000, then I would consider [the Wyckoff Accumulation] confirmed”.
Should this bullish pattern play out in full, Survivalism suggests that Bitcoin will return above $10,000 in around a week’s time.
1. Starting to look a lot like Wyckoff Accumulation. If this current pullback creates a higher low above $8,000 then I would consider it confirmed.
— Financial Survivalism (@Sawcruhteez) October 8, 2019
On the fundamental side, the Federal Reserve’s Chairman, Jerome Powell, recently revealed that the central bank may resume the expansion of its balance sheet. While it has been made clear that this isn’t quantitative easing, many in the cryptocurrency industry say that this tacit money printing is decisively bullish for Bitcoin — a money that is deflationary (disinflationary for now), non-sovereign, public, decentralized, and so on and so forth.
As Anthony Pompliano would say, it’s Bitcoin rocket fuel. Whatever that means…
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