Bitcoin is displaying the same technical conditions that have historically marked major market bottoms, even as some on-chain indicators continue to point to the possibility of further downside.

In his latest analysis, crypto analyst Ali Martinez said that metrics such as MVRV and Cumulative Value-Days Destroyed (CVDD) still place BTC’s potential cycle bottom in the $40,000 to $50,000 range. However, the crypto asset’s monthly chart is now showing a technical setup that has consistently appeared near the end of previous bear markets.

Rare Technical Trifecta Returns

According to Martinez, this pattern consists of three important signals occurring together: the monthly Relative Strength Index (RSI) falling to around 43.65, the Chande Momentum Oscillator (CMO) dropping to roughly -71, and Bitcoin testing its 50-month moving average.

In the three previous market cycles, this combination coincided with major long-term bottoms. For example, back in March 2015, the setup appeared when BTC traded at $235. Although the price later briefly declined to $162, Martinez said the signal preceded an 8,300% macro expansion.

A similar pattern emerged in January 2019, when the crypto asset was near $3,333, slightly above the cycle low of $3,124 recorded a month earlier, before beginning a rally of 1,911%. The same technical cluster also appeared in December 2022, when it stood at $16,270, just above the $15,473 cycle bottom while hovering near the 50-month moving average. The analyst said that move was followed by a 675% rally.

Interestingly, Bitcoin’s correction to $58,000 last month triggered the same historical setup once again.

According to the analysis, the monthly RSI has now fallen below 43.65, the Chande Momentum Oscillator has cooled to -71, and Bitcoin is trading around its 50-month moving average. While Martinez acknowledged that on-chain indicators still leave room for the crypto asset to revisit the $40,000 to $50,000 range in what he described as a “sweep of the CVDD floor,” he said the current technical alignment has represented a dominant accumulation zone.

Based on that combination of signals, Martinez stated,

“Shifting focus away from short positions and toward spot BTC accumulation offers a highly favorable risk-to-reward ratio at these levels.”

Buying Opportunity

Martinez is not alone in seeing the current market as a buying opportunity. Crypto analyst Doctor Profit also recently noted that investors waiting for a traditional four-year cycle bottom in September or October could miss the opportunity. While he acknowledged that a large liquidity zone remains around $54,000 and said Bitcoin could still decline about 15% from current levels, he does not expect the crypto asset to fall below $50,000.

Instead of waiting for lower prices, Doctor Profit suggested accumulating Bitcoin gradually rather than investing all at once. He also said the next major rally is unlikely to begin immediately. The analyst said several upcoming events could strengthen market sentiment before the asset reaches its expected cycle low.

These include the planned rollout of tokenized stocks involving BlackRock, the New York Stock Exchange, the S&P, Nasdaq, and the DTCC. He also mentioned speculation surrounding the CLARITY Act’s possible passage in August.

Source: CryptoPotato