Bitcoin price recently experienced a significant pullback after reaching highs of nearly $50,000 per coin. This sudden selloff has triggered an early “top” warning signal in BTCUSD. However, data suggests that the top cryptocurrency could potentially double in price before reaching its actual peak.
The surge in BTC price was fueled by the excitement surrounding a Bitcoin Exchange-Traded Fund (ETF), which led to a 300% increase from lows of $15,000. The post-ETF approval saw prices soar to as high as $49,000 before a sharp rejection caused a drop back to its current level of $42,000.
Although a 15% correction after a substantial climb is not unusual, the 1W Fisher Transform indicator has given an early indication of a potential top signal. This technical tool, which smooths out price action and identifies extreme price levels, reached a +6 standard deviation. This is one of the most extreme readings ever recorded on this particular timeframe.
What is especially noteworthy is the historical behavior of the Fisher Transform indicator on the weekly timeframe. It accurately predicted the top in 2019 and in 2021, both times providing a warning several weeks in advance after reaching a +6 standard deviation.
However, it is essential to understand that this warning signal suggests an early indication of a top, not the actual top itself. In both 2019 and 2021, BTCUSD continued to rally significantly even after the Fisher Transform turned bearish. In 2019, there was an additional 83% increase in price before the peak occurred, and in 2021, there was a further 122% return on investment before the actual peak was reached.
These findings suggest that while Bitcoin price may be approaching a peak, there is still potential for another 100% increase in value. If BTCUSD were to double from its current price of $42,000, it could surpass $84,000 and establish new all-time highs.
It is worth noting that the ROI in 2021 exceeded that of 2019, indicating increasing returns as more participants become aware of Bitcoin. With institutional involvement, actively trading spot ETFs, and other factors, there are endless possibilities for Bitcoin’s future performance.
Please note that this information is provided for educational purposes only and should not be considered as investment advice. Conduct thorough research before making any investment decisions and be aware that investing always carries risks.