At no other time of year are human beings more open to the idea of miracles than now. But what about a crypto Christmas miracle for Bitcoin?
Rather than the miracle being the premise for a holiday movie, it is possible that the appearance of a testable technical retracement signal could put a miraculous bottom for the cryptocurrency market.
More credit for a Santa Claus rally on Crypto
Dozens of Hallmark-style Christmas movies include the worldwide “miracle” in their title. The idea that Santa Claus could reach the homes of children around the world in one night shows the kind of feeling of hope that can be generated at this time of year.
Related reading | Could Bitcoin Benefit From A Santa Claus Rally?
Across the cryptocurrency market, investors got the equivalent of coal for Christmas, that is, unless a miracle happens. That miracle has an above-average probability of happening this holiday, according to the Fisher Transform technical indicator on the 3-day timeframe of BTCUSD.
This technical indicator has only shown such extreme deviation on two other occasions throughout its history, and when you read at what prices this signal was triggered previously, it won’t help, but will give you more hope of a Santa Claus rally in the coming years. days.
Could a Christmas miracle make investors merry? | Source: BTCUSD on TradingView.com
Bitcoin’s most extreme background signal is back at Christmas
Fisher Transform is a technical indicator that was created by John F. Ehlers and, according to Investopedia, “Convert prices to a Gaussian normal distribution.” Doing so makes it much easier to spot tipping points. Both the extreme readings in standard deviation and the signal itself that changes direction present a point of probability of inversion above normal.
When it comes to objective technical analysis, few technical indicators provide testable results as often as the Fisher transform. The version of Fisher Transform shown above and below is a custom tool designed by Moe_mentum bent the iFish Smooth & Divergence, available with a two-week trial or $ 525 for lifetime use.
Could this signal be another gift for Bitcoin holders? | Source: BTCUSD on TradingView.com
On the 3-day BTCUSD charts, the Fisher Transform shows a possible reversal through the change in deviation from -2.0, a point of extremes reached only two other times before.
The first of the two cases was in October 2011 when Bitcoin was trading at around two dollars a coin. The second was at the bottom of the bear market in December 2018. Now, about three years later, the extreme level has been reached again, just as the indicator begins to change.
Related reading | Bitcoin Falls Flat: Examining Uncommon Bull Market Corrective Pattern
The Fisher Transform is an unlimited indicator, which means that it could very well reverse again and continue towards a deeper and more extreme deviation. However, doing so would only further increase the likelihood of a further reversal. This makes the Fisher Transform a useful tool for those who trade a “mean reversal strategyAnd try to profit when prices move to unusual extremes.
Bitcoin price could still make another low while Fisher Transform does not. At that point, a bullish divergence would be possible and another buy signal could be generated, again improving the chances of a positive outcome.
Investopedia cautions that the potentially lagging indicator could have several limitations. For example, “Asset prices are not normally distributed, so attempts to normalize prices could be inherently flawed and may not produce reliable signals.”
However, the Fisher transform remains one of the most statistically reliable through backtesting of data, especially when combined with other confirmatory tools. And these statistics show that a crypto Christmas miracle could be on the way.
#Bitcoin by D3 – IFS reading one of the historical lows in the region (OS)
backtest shows that the market bottomed out
D3 at (-2 deviation) was 👇
-> October 2011 at $ 2.15
-> December 15, 2018 at $ 3135https://t.co/125TAgbVlu
– Moe (@Moe_mentum_) December 23, 2021
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Featured image from iStockPhoto, Charts from TradingView.com