Bitcoin (BTC), previous cycle bottom signal reappears... Will it reach $126,000 again?

▲ Bitcoin (BTC)/AI generated image

A bullish signal that captured the bottom of the last cycle has reappeared in Bitcoin (BTC). The last time the same signal emerged, Bitcoin surged from $15,000 to $126,000.

CryptoPotato reported on August 6 (local time) that crypto analyst Ali Martinez identified a bullish divergence between Bitcoin's price and net capital flow. The analysis suggests that a market bottom may have already formed, as capital flows are improving despite price weakness. Martinez stated, “The same signal has returned.”

Martinez explained that this signal led to a long-term rally for Bitcoin after capturing the previous cycle's low. He also stated that a buy signal had previously appeared on the Supertrend, a trend-following indicator. He argues that different indicators are simultaneously pointing to a potential trend reversal upwards.

Analyst Doctor Profit also suggested the $54,000 to $64,000 range as a buying zone. He believes that a strategy of staggered buying within a broad bottoming range is more appropriate than trying to pinpoint the exact lowest point. Doctor Profit said, “We cannot predict the exact bottom, but we are preparing based on the assessment that the current range is the bottom.”

Fidelity's proprietary evaluation metric, Yardstick, has also fallen to levels similar to past undervalued periods. Fidelity explained that similar figures appeared during long-term accumulation phases and and relative market bottoms. If past trends repeat, October 2026 could be a critical juncture for assessing Bitcoin's long-term cycle.

However, a counter-argument emerged that it is too early to confirm the bottom. Julio Moreno, Head of Research at CryptoQuant, pointed out that Binance's Estimated Leverage Ratio (ELR) has risen to about 0.22, the highest level in this cycle. This indicator compares futures open interest to the exchange's Bitcoin holdings. Moreno emphasized that even in the 2022 bear market, a stable bottom was formed only after excessive leverage was cleared, and current figures are not grounds for confirming a trend reversal.

[Article Key Summary]

-A bullish signal similar to the previous cycle's bottom has appeared between Bitcoin's price and net capital flow.

-The last time the same signal emerged, Bitcoin surged from $15,000 to $126,000.

-Binance's Estimated Leverage Ratio has soared to approximately 0.22, indicating the possibility of further volatility.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*