While the Bitcoin Dollar Cost Average (DCA) indicator is firmly in the “raising” bull market sector, analysts believe its signals are too good to be true.
BTC has been done
The ticker goes down
For the fourth time just this week, the price indicator has flashed green, a big warning for the bears.
In a tweet on February 16, crypto market analyst Mohit Soraut declared that the Dollar Cost Average (DCA) indicator now ‘suggests a bullish bull market’.
The DCA breakout eventually led to a 640% BTC price increase
The latest bitcoin metric to flip bullish over the longer term, the DCA indicator, is also garnering attention from major bitcoin investment boards.
His buy signals are rare, Saurout has only seen three in the history of bitcoin, each without serious BTC price appreciation.
Today, for the fourth time, the signal suggests a rising bull market, he wrote in the comments, describing the event as “the mother of all BTC bullish signals.”
DCA is an investment strategy in which the buyer allocates a fixed amount of capital to exposure to the asset at specified intervals. This could be a $10 per week purchase in Bitcoin, a concept that is routinely used as an optimal way to gain exposure to volatile cryptocurrencies.
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The DCA indicator measures the relative profitability of a hypothetical DCA strategy involving purchases of $1 per day for one year.
Once it crosses into profitable territory, marked 365 on its scale, historically major bull markets have begun, argues Sorut. One exception appeared in mid-2022 when the 365 mark reversed after moving up and BTC/USD began a journey to a multi-year low near $15,600.
But in a climate of sustained growing confidence in bitcoin’s 2023 recovery, others were willing to give the latest breakout the benefit of the doubt.
“A rare giant bitcoin buy signal,” declared Dan Tapiero, founder and CEO of 10T Holdings, in a repost of Sorota’s findings.
Bitcoin price death cross and a “failed breakout”.
Aside from DCA, another rare bull signal arrives this month in the form of the Williams %R oscillator, Cointelegraph reported.
Related: Bitcoin rose 300% in the year before it was finally halved – is 2023 any different?
However, depending on the time frame, its bitcoin bull run signals are not yet clearly pointing to the moon.
Caleb Franzen, a senior market analyst at Cubic Analytics who flagged the breakout, warns that bitcoin’s six-month trip to the upside represents a “failed breakout.”
The largest cryptocurrency faces a huge obstacle in the form of several moving average (MA) overheads that will act as a counterweight for most of 2022.
Two MA “death crosses” have formed for the first time this month, according to data from Cointelegraph Markets Pro and TradingView.