A W-shaped reversal or a strikeout?

BTC briefly climbed above 63k over the weekend, a two-week high, with a weekly gain of nearly 4%. The BTC ETF, which had seen outflows for ten consecutive days, finally saw a net inflow of $220 million. Around the same time, John Bollinger, the creator of the Bollinger Bands indicator, posted a chart. The daily price of BTC, along the lower Bollinger Band, formed a W-shape. "A perfect fractal W bottom," he said. "Will it break the downtrend this time?" The question is, how strong is this W bottom? Bollinger is looking at the daily chart. The W bottom on the daily chart is indeed clearly visible. Two bottoms, one rebound, and now the price is attempting to break through. However, the long-term trend still depends on the weekly chart. The W-bottom on the daily chart can only support a short-term rebound. The weekly chart is what truly defines the trend. Switching to the weekly chart, the lows of February and June 2026 are forming a larger W-shape, provided the July rebound continues until the end of the month. The daily W-bottom is basically complete, while the weekly W-bottom is not yet formed.

Three Strikes and You're Out

Chain Education recalls an article I wrote in July 2021 titled "Bears Strike and You're Out." That was during the mid-2021 crash, when bears pushed BTC down to the 29,000 level three times. The first time was May 19th, the second time was June 22nd, and the third time was July 20th.

Each time, the bulls pushed it back. During the first two tests, the market was still guessing whether it was the bottom. Only when the bottom was confirmed on the third test did the reversal truly become clear.

Subsequent events confirmed Jiao Lian's prediction in his article. Jiao Lian wrote: "Two feet are not enough to stand steadily; three feet are the optimal solution." A W-shaped bottom represents two feet. Three strikeouts represent three feet. Imagine skipping stones on a river. The stone bounces up and falls back down the first time it touches the water. It bounces up again and falls back down the second time. These two touches form a W shape. If the stone sinks, the W-bottom pattern fails. If the stone bounces again, it's the third time it hits the water, meaning it strikes out. Only after this bounce can the stone truly take flight. However, there's a fundamental difference between skipping stones and the bottom of BTC. Skipping stones eventually sinks. BTC's so-called skipping stones cleanses out leverage with each bounce. The more bounces, the stronger the bottom. The final outcome isn't sinking, but reaching the shore. This is how BTC crosses the river, and also how it survives a tribulation. The only question is, how many times will this hurdle be overcome? Looking at it from a longer perspective... The current price of 63k points to a very specific macroeconomic position. The US BTC ETF officially began trading in early 2024. From March 2024 until the surge following Trump's election victory in October, BTC experienced a period of consolidation lasting over half a year. The price fluctuated repeatedly between 52k and 70k. The central point of this range falls roughly between 62k and 63k. What does this mean? It means this price represents a consensus and equilibrium formed by the market under the combined macroeconomic conditions of "ETFs launched but the overall tone unclear + Trump potentially winning or losing the election." It's not the peak of a trend, nor the abyss of a bottom; it's a price at which the market pauses to wait and observe. The nearly six months of fluctuations and two bottoming rebounds have ultimately brought the price back to this position. Like a stretched spring, it slowly bounces back to its most natural and comfortable place after being released. Perhaps the market is returning to this central point to seek support and await new macroeconomic variables to provide direction? So this time, is it a W-bottom reversal, or a three-strikes-out? Bollinger's daily W-bottom chart offers a positive outlook. The historical pattern of three strikes provides a prudent reference. The consolidation range after the ETF launch in 2024 provides a macro-level anchor. Will it jump twice, three times, or even more? Like skipping stones, sometimes even God doesn't know how many times they'll bounce. The only certainty is that whether it jumps two or three times, this pebble will not sink to the bottom.