- Bitcoin may be forming a W-bottom reversal pattern on Bollinger Bands after rebounding from recent multi-month lows.
- The April 9 recovery aligned with positive market sentiment after the U.S. paused controversial tariffs on several international partners.
- Despite the recent correction, over 85% of Bitcoin holders remain in profit, showing continued investor confidence in long-term value.
Bitcoin is showing signs of stabilization following a recent market downturn that saw the cryptocurrency fall to its lowest level in several months. According to renowned technical analyst John Bollinger, Bitcoin could be forming a W-bottom pattern, which historically signals a bullish reversal.
A W-bottom pattern has emerged on the Bollinger Bands, which Bollinger developed as his technical analysis instrument. This pattern often appears after significant price drops and tends to suggest an upcoming trend change. It generally forms when prices establish a higher low and tap the lower band, a structure currently visible in Bitcoin’s chart.
Bitcoin Rebounds After Brief Support Breach
During the market plunge, Bitcoin tested the essential blue boundary noted on Bollinger’s chart. On April 7, Bitcoin experienced its most severe drop when its value reached $74,415. The cryptocurrency market moved amid general equity market declines during this period as the United States stock values dropped.
However, the price quickly recovered and moved higher by April 9. The rebound coincided with the U.S. government pausing several contentious tariffs, a move that lifted both equities and digital assets.
Current Price Levels Show Signs of Recovery
Bitcoin is currently trading at $79,508, after recovering from an intraday low of $78,669. While still down nearly 27% from its January high near $109,000, the price action appears to have stabilized. The formation of a W-bottom pattern offers traders a technical reason to anticipate a shift in market direction.
While Bollinger suggests a potential bottom, other analysts remain cautious. Notably, Bloomberg commodity strategist Mike McGlone has not changed his view that Bitcoin could experience a significant mean reversion. He previously forecasted a possible decline toward $10,000.
Nevertheless, data shows that a large majority of Bitcoin holders remain in profit despite the correction, indicating strong underlying support from investors.
