A financial analyst, Tony Severino, has shared his insights on the best time to buy Bitcoin, focusing on key technical indicators. He cautions against rushing in, emphasizing the importance of careful analysis to avoid potential pitfalls.
The Upper Bollinger Band: A Buying Signal? Maybe.
Severino analyzed Bitcoin’s price chart, looking at monthly candlesticks, Bollinger Bands, and past performance. He points out that in late 2021, Bitcoin touched the upper Bollinger Band but didn’t close above it. This led to a significant market downturn.
Currently, with Bitcoin trading above $94,000 and the upper Bollinger Band around $108,000, Severino stresses that simply reaching this level isn’t a buy signal. He believes a monthly close above $108,000 is crucial to confirm a bullish trend. Only then would he consider buying. Failure to close above this level could signal another bear market. He highlights the importance of protecting your investment and avoiding the urge to buy based on fear of missing out (FOMO).
Bearish Signals Emerge: Heikin Ashi and Fisher Transform
Adding to the cautious outlook, Severino notes that the Bitcoin Heikin Ashi candles have turned bearish. This is significant because, historically, similar signals have preceded prolonged bear markets and sharp price drops. He shows a 12-week chart highlighting this red candle, a rare occurrence since previous peaks.
Further reinforcing this bearish signal, the Fisher Transform, a tool used to spot trend changes, is showing a bearish crossover. When these two indicators (Heikin Ashi and Fisher Transform) align, Bitcoin has historically experienced substantial and lengthy declines.
The Bottom Line: Patience is Key
Severino’s analysis emphasizes the need for caution and patience. While the potential for gains is always present, the risk of a significant downturn is also real. He recommends waiting for clear confirmation signals before investing in Bitcoin, prioritizing capital preservation over the fear of missing out.
