An analyst specializing in cryptocurrencies suggests that a crucial technical indicator is indicating a potential parabolic surge for Bitcoin (
BTC
).
Known as TechDev, this analyst with a large following of 458,300 on the social media platform X, points to the Chaikin Money Flow (CMF) metric as evidence that Bitcoin may be gearing up for a blow-off top this cycle.
A blow-off top in technical analysis refers to a chart pattern where there is a sudden price increase followed by a steep decline.
“Bitcoin blowoff tops only happen after 4W CMF breaks this line.”
The CMF is a metric that calculates the volume-weighted average of accumulation and distribution over a specified period. TechDev’s analysis of a four-week chart indicates that the CMF has turned green three times in Bitcoin’s history – in 2011, 2013, and 2016 – just before significant price surges.
Additionally, TechDev presents a chart using the Bollinger Bands Bandwidth (BBW), a tool that measures price volatility to predict sharp price movements based on volatility contraction. The chart suggests that Bitcoin is exhibiting a pattern similar to the one seen at the beginning of 2017, which was followed by a substantial price increase.
“You’ve been here before. Forty-two months after the start of an already-ended long compression. Hovering at the prior high, pressed against the top band. Bandwidth squeezed and bounced. Expansion has just begun. Next leg poised to accelerate.”
At the time of writing, Bitcoin is trading at $66,388, marking a nearly 5% decrease in the past 24 hours.
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