According to the candlestick arrangement on the daily chart, Bitcoin is moving within a range. Bitcoin is also down nearly 20% from its all-time high at spot prices. Although the string of lower declines posted in the past few trading days is considered bearish, one analyst says so optimisticExpecting an encouraging recovery in the coming sessions.
This indicator is flashing green: Is it time for a Bitcoin rally?
Moving to Historically, the indicator has accurately indicated buying opportunities when it turns from the oversold zone.
The Williams %R oscillator is an important technical indicator used by chartists to evaluate momentum and identify potential oversold or overbought conditions. When the indicator drops below -80, it indicates that the asset being analyzed is in the oversold area, which may indicate a buying opportunity. Conversely, when it rises above +20, it could mean that the asset is overbought, prompting the trader to adjust his strategy accordingly.
Related reading
Since the start of 2023, the analyst has noted that the 50-day Williams %R oscillator charting Bitcoin prices has fallen into oversold territory on four occasions. It is worth noting that every time the oscillator reverses from this area, Bitcoin prices rise in tandem.
Now, with the Williams %R oscillator back from the oversold zone about ten days ago, the analyst is optimistic. It came back from oversold territory in January 2024, before rallying in the first quarter of 2024.
If past performance is any indication, BTC is likely ready for a rally. Given the extended sideways movement and lower lows since prices peaked in mid-March 2024, this development would be a massive boost for the currency.
Does BTC stand a chance after the extended consolidation?
The asset has become more dynamic since the approval of exchange-traded funds (ETFs) for bitcoin. Broader market conditions, such as regulatory changes, macroeconomic trends, and investor sentiment are increasingly influential.
Therefore, this dynamic can affect the accuracy of technical indicators such as the Williams %R oscillator. This tool is delayed and does not take into account real-time events. Therefore, although the oscillator has been reliable in the past, it may not necessarily predict the future cycle accurately.
For this reason, the coming days and weeks will be crucial for Bitcoin. If the price breaks its current range upwards, this may lend credence to the bullish interpretation.
Related reading
Currently, BTC is in a narrow range. According to the daily chart, support is at $56,500, and resistance is at $66,000.
Featured image from DALLE, chart from TradingView
