Bitcoin is trading around $107,000 after the recent sudden crash, maintaining stability to prevent further decline, but has yet to return to trading above $110,000. Notably, popular crypto analyst Titan of Crypto shared a detailed Gaussian Channel analysis on despite short-term volatility. His post, which was accompanied by a Bitcoin price chart, shows how Bitcoin’s position against the Gaussian channel provides a clear view of the ongoing cycle.
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Bull market intact above Gaussian channel
Titan of Crypto noticed that Bitcoin’s placement above the Gaussian channel represents strength in the long-term trend. As shown in the weekly candlestick price chart below, the green channel corresponds to bullish phases, while the red regions represent bearish downturns, of which the 2022 bear market is a prime example.
At the time of writing, the upper band is around $101,300 and is on an upward trend. Therefore, Bitcoin’s price action around $107,000 means that it has yet to break into the Gaussian channel and the overall market structure is still solid. From this, it can be inferred that Bitcoin’s current pullback from October 6’s all-time high above $126,000 is just a temporary pause. within a larger bull market.
Bitcoin Gaussian Channel. Source: Titan by Crypto on X
However, while the Gaussian channel value looks favorable, Crypto’s Titan noted that the indicator should not be treated as a trading trigger. “It is not a buying signal, it is an indicator of the macro context,” he declared. Being above the Gauss channel does not necessarily mean buying more. It simply means that the bull market structure is still intact.
The Gauss channel works best in combination with other indicators such as trading volume, moving averages and on-chain accumulation trends to confirm directional momentum.
Coinbase Premium Gap turns red
Speaking of other indicators, on-chain data from CryptoQuant shows that the Coinbase Premium Gap, a metric that compares the price of Bitcoin on Coinbase to other exchanges, has turned red. As shown in the chart below, Coinbase’s Premium Gap fell sharply from positive premium levels above +60 earlier this week to a low of -40 as the Bitcoin price fell to $101,000.
Interestingly, at the time of writing, the Coinbase Premium Gap has risen to around -10, meaning US investors are too is starting to turn bullish again. This can be seen as a bullish signal, as similar declines in US demand were recorded between March and April before the Bitcoin price eventually surged more than 60% to hit new all-time highs.
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However, a red Coinbase Premium Gap alone is not decisive. It should be so interpreted alongside others data points including ETF inflows, trading volume, liquidity and derivatives funding rates. At the time of writing, Bitcoin was trading at $107,120.
Featured image from Vecteezy, chart from TradingView