An analysis says a double-bottom "W" pattern that suggests a possible end to the downtrend is forming on bitcoin charts.

U.Today, a blockchain media outlet, reported on Wednesday that John Bollinger (존 볼린저), the developer of Bollinger Bands, said the pattern could be a meaningful signal for bitcoin, unlike several earlier rebound attempts.

Bitcoin has been trapped in a steep downtrend for the past few weeks. Several bullish patterns were discussed in the market, but they were repeatedly invalidated by strong selling pressure. Against that backdrop, Bollinger focused on the complex double-bottom "W" structure now developing.

A chart Bollinger presented showed bitcoin extending its correction after an attempt to rebound to $82,000 on May 8. The price plunge pushed the lower Bollinger Band, and a three-stage bottom formation appeared in the process, he said. Bollinger described the setup as "perfectly fractal". He meant a smaller micro pattern sits within a larger structure.

He also mentioned the possibility of a larger technical signal. He said investors should look beyond the daily chart and also check the weekly chart. Bollinger said that on the weekly timeframe, the current daily correction could be forming the second leg of a higher time-frame fractal "W".

He said the key is whether bitcoin breaks above the middle peak. If the current daily structure holds and the price clears the middle peak around $65,000, the downtrend that has lasted for months could end, in his view. With several bullish patterns having failed, he sees this pattern as a signal more weighted toward a possible trend reversal than a simple short-term rebound.

Market conditions are still not favorable for bitcoin. Bitcoin is trading around $61,556 and the recovery has been limited. ETF outflows are continuing, and concerns about interest rate hikes are still weighing on the market.

That means whether a rebound signal on the chart leads to an actual trend reversal will likely need confirmation from both the price structure and external fund flows. Whether bitcoin can reclaim $65,000, and whether it can break the downtrend while overcoming ETF outflows and rate worries, are expected to be key points to watch for the time being.

Here is a chart highlighting a developing 'W' pattern in bitcoin:native. Note that it is perfectly fractal. The are small 'w's at the nadirs and a small 'm' at the apex. For extra credit look at the weekly to see a higher time frame fractal 'W'.https://t.co/jcmfX6NXRy