Bitcoin (BTC) has seen its price drop continuously over the past week. There are times when this currency even decreases to the threshold of 8,500 USD. The general opinion among analysts is still a good sign for a rally for BTC.
What makes many people interested at the moment is where the bottom of this BTC decline is, and is there any signs of a rally?
Litecoin signals a bottom, a good sign for Bitcoin
Cryptocurrency trader Big Cheds recently said that Litecoin appears to be forming 3 potential bottoms. It is marked by consolidation around the central price point and divergence with a 4-hour balancing volume, and relative strength indicators.
This convergence point indicates that Bitcoin will begin to break higher in the days ahead as divergence takes place.
– Big Cheds (@BigCheds) February 29, 2020
What does this mean for Bitcoin?
For a long time, LTC has acted as a harbinger for the rest of the cryptocurrency market.
The most memorable case was in the first quarter of 2019. At that time, LTC had started to increase by tens of percent, the following week was higher than the previous week. Meanwhile, Bitcoin is still lying motionless around $ 4,000. For about 2 months, LTC alone went up. After that, BTC and other digital assets also increased.
Just like earlier this month, Litecoin started its uptrend before Bitcoin increased. This development has been pointed out by cryptocurrency analyst Loma in a tweet as below.
What if Litecoin is leading Bitcoin again, like it did last year? pic.twitter.com/VHB3RLm5rd
– Loma (@LomahCrypto) February 1, 2020
Therefore, the ability to market ahead of Bitcoin is very important. If LTC starts to bottom and move up, it will also signal that Bitcoin will have a similar move.
Other signs of price increase
Analyst Nick Chong found a correlation between the peak VIX and the bottom of Bitcoin. In the past 5 years, VIX has surpassed 30 in 3 times. At that time, each time BTC was located very close to the bottom.
For example, the time when VIX passed 30 in August 2015, Bitcoin was at the bottom of $ 220 before launching to $ 20,000, a growth of nearly 10,000% in the following 26. And another time in February 2018 when BTC bottomed 6,500 after falling from $ 20,000.
This week, VIX passed 30 again when the S&P 500 started going down, down 10% for the trading week. If history repeats itself again, Bitcoin is very close to its bottom.
.@CarpeNoctom suggested spikes in the VIX correlate (spurious?) with Bitcoin bottoms. He's not kidding.
Times the VIX passed 30 in the past 5 years:
Dec 23, 2018: a week after BTC fell to $ 3,150
Feb 3, 2018: when BTC bottomed at $ 6,500
Aug 22, 2015: when BTC bottomed at ~ $ 220 pic.twitter.com/vS7E60rNJp
– Nick Chong (@_Nick_Chong) February 27, 2020
That's not all. Trader Sawcruhteez said that BTC in the past few days has formed a pattern similar to the pattern that was seen in December. Which means it's likely that Bitcoin is bottoming out and could soon explode higher than $ 9,000.
– Financial Survivalism (@Sawcruhteez) February 29, 2020
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