As noted on February 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: The oscillator crossover is a “great sign”
Bitcoin price rose 40% in January and continues to hold higher levels which is showing breakout signals across various on-chain indicators.
Some analysts are cautious, choosing to wait and see if improving conditions continue, but for Franzen the data coming from the Williams %R oscillator is of particular interest.
Williams %R is a momentum oscillator that measures how close BTC/USD is to its recent highs or lows. Momentum oscillators are used to measure the strength of a price trend, and Bitcoin’s January performance made them a major 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 thread on Twitter.
“Historically, letting the bottom line indicate two things: 1. The low of the cycle. 2. The end of the bear market.”
He added that the phenomenon was a “great sign” while acknowledging that the bull’s run was not foolproof.
However, the accompanying chart showed the close relationship between the cross of the Williams %R threshold and subsequent long-term BTC price behavior.
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The latest, for example, came in April 2019, with BTC/USD beginning its journey out of bear market lows to finally reach all-time highs in November 2021.
Meanwhile, the “warning” comes in the form of changing timeframes for Williams %R. Franzen noted that only the 12-month repeat of the scale has flipped higher, with the 18-month version remaining “oversold.”
He added, “If/when this >crosses oversold, it will add to a bull condition.”
BTC/USD with Williams %R Oscillator Chart. Source: Caleb Franzen / Twitter
Signs of a Bitcoin rebirth are coming thick and fast
Franzen is not alone in keeping faith when it comes to Bitcoin’s current price action.
Related: Happy Anniversary, Tesla – Elon Musk Still Acquiring 9.7K Bitcoins
Over the weekend, popular trader Credible Crypto described the status quo as “identical” to the Bitcoin hack in late 2020 that took it past its all-time high since 2017.
Encouraging signals also came from macroeconomic sources, particularly the US Federal Reserve, as well as internal phenomena such as the long-awaited “golden cross” event on the daily chart.
Meanwhile, January saw a renewed influx of institutional funds into bitcoin, which took up the majority of the resource as investors turned away from several altcoin products. Weekly inflows for the last week of the month were the highest in seven months.
