Two analysts say Bitcoin bottom reached using different charts

Two independent analysts published signals in early September concluding that Bitcoin’s bottom has been reached, each using a different charting approach. Charles Edwards of Capriole Investments issued a signal on Sept. 4 based on stablecoin liquidity, while the analyst known as Root used price structure and moving averages.

Edwards’ indicator, the Capriole Market Hedge Ratio, measures the USDT/BTC market-cap ratio over a rolling 30-day period. The reading dropped to -20.42%, near the threshold marked on his chart. A falling ratio reflects capital rotating out of stablecoins and into Bitcoin. Edwards noted that similar readings have often preceded rallies since 2020 and wrote that the signal remains valid only while the ratio stays in its current range; he set the signal’s horizon as weeks and said it would be invalidated if the ratio flips to a negative regime he marks as red.

Root’s signal is based on price reclaiming three levels: the 200-day moving average, the 21-week moving average and the short-term holder cost basis. Root’s chart shows the current breakout occurred 1,314 days after a 2023 signal, roughly 65 days earlier than prior gaps of 1,375 and 1,384 days across the last 7.5 years. Root described the timing as about two months ahead of previous cycles and cautioned that an earlier breakout in time does not fully exclude a continuation of the bear market.

At the time of the analysts’ posts, Bitcoin traded near $79,755 with a market capitalization close to $1.6 trillion. Price was just above the 21-week average at $79,355, a cushion of about 0.5%. Below that level sit the short-term holder cost basis at $70,853 and the 200-day average at $69,785, forming a support shelf around the $70,000 area. A weekly close below that shelf would breach the price structure Root tracks.

Edwards’ chart shows roughly nine comparable readings since January 2020, most preceding rallies though one in October 2021 aligned with a near-cycle top. Both analysts published clear invalidation levels: Edwards’ thesis would be undermined if his Market Hedge Ratio flips into the red zone he defines, and Root’s breakout case would be undercut by a weekly close below the support shelf beneath the 21-week and 200-day averages.

Neither analyst forecast an immediate sustained bull market. Edwards framed his signal as a short-term condition while Root framed his in the context of cycle timing. The coming weekly closes and the behavior of stablecoin balances were identified as the immediate tests of whether these signals remain in force.