Bitcoin (BTC) may have established a significant long-term price floor, supported by the signals from a widely recognized technical indicator, according to analyst Willy Woo.
Fisher Transform highlights historical bull trend signal
Last month, the Fisher Transform indicator, a price trend analysis tool developed in 2002, delivered a rare monthly bullish crossover for Bitcoin. Willy Woo, a prominent onchain analyst, reported that this is only the fourth instance of such a crossover in the cryptocurrency’s history.
Previous bullish crossovers in the indicator coincided with the close of major Bitcoin bear markets, including the late 2022 downturn, when the Fisher Transform reached -3.83. This historical correlation has led analysts to pay close attention to its latest movements.
Woo shared in a social media thread that the most recent crossover, which took place in July at -2.26, may mark the start of a new macro uptrend for BTC/USD—if the historical pattern holds true. He stated that Bitcoin has successfully identified a bear-market bottom following each of the past three major monthly bullish crossovers seen by the indicator.
BTC bottoms: 3 for 3 without fake out. Latest cross is the 4th on record.
While the pattern offers a bullish outlook, Woo cautioned that prices could still experience consolidation or even a further decline before a decisive uptrend forms. He noted similar behavior during previous bull markets, where bearish crossovers were later succeeded by renewed bullish signals. According to Woo, trading behavior from speculative market participants during uptrends can increase market volatility and fake signals, whereas their absence at bear-market bottoms lends confidence to the Fisher Transform’s signals at these stages.
Mini dictionary: Fisher Transform indicator, a technical tool that converts asset prices into a normally distributed dataset to help traders objectively identify trend reversals and turning points.
Bullish divergence on weekly chart
In addition to the monthly signal, Bitcoin’s weekly charts also indicate a potentially bullish divergence. The Fisher Transform on the weekly timeframe reached a swing low of -2.85 at the end of December last year. At that time, Bitcoin’s price hovered near $90,000. Since then, the indicator has recorded higher lows, while the asset itself has touched lower lows, signaling a bullish divergence similar to those seen at the close of Bitcoin’s 2022 bear market.
Woo explained that such bullish divergences on higher time frames can provide early warnings of broader positive price shifts. He also noted that these signals historically accompanied the closing stages of protracted downtrends for BTC.
| Indicator | Timeframe | Signal | BTC Price Reference |
|---|---|---|---|
| Fisher Transform | Monthly | Bullish crossover | -2.26 (July) |
| Fisher Transform | Weekly | Bullish divergence | -2.85 (December) |
Analyst remains cautious despite signals
Despite these technical indicators strengthening the case for a BTC market bottom, doubts remain among analysts as to whether the recent 21-month lows near $57,000, seen on July 1, mark a final bottom for this cycle.
Woo recently observed that buyer interest at these low levels appeared muted, with only a limited number of large investors accumulating BTC at the time. This lack of widespread participation could affect the reliability of technical reversal signals, especially in the short term.
When price falls to a point where investors find value, buy-pressure fires back up but we are devoid of speculators. Price reverses more cleanly without the choppy fake outs seen in tops. Hence bottoms are easier to define. This is seen in many signals, also seen in the Fisher Transform here.
Although a range of onchain metrics have flashed bear-market reversal signals in recent months, the market appears to be monitoring for confirmation before making broader moves. The reaction of traders to these signals could determine Bitcoin’s near-term direction.
