Bitcoin’s difficulty ribbon compression came out of a downward trend that started with the collapse in March due to the coronavirus.

According to two indicators that have recently become bullish, Bitcoin (BTC) simply needs history to repeat itself to record significant price increases.

On 28 September, the on-chain Glassnode monitoring resource reported that Bitcoin’s difficulty ribbon compression has left its green „buying“ zone for the first time since the collapse due to the coronavirus pandemic in March.

Glassnode alludes to „significant“ price increases for BTC

The difficulty ribbon compression is an indicator based on the difficulty ribbon, a parameter created by the statistician Willy Woo with the aim of evaluating the best times to buy Bitcoin.

Ribbons use the values of a simple moving average on mining difficulty, contracting when miners sell BTC to cover their expenses and in the capitulation phases, which often coincide with the last stages of the bear market.

These events leave the strongest miners in play, leading to recovery and price increases.

Compression adds standard deviations to the model, allowing analysts to quantify ribbon compression and calculate when to enter the market with even greater accuracy.

„Ribbon difficulty compression is directed upwards and has been out of the green purchasing zone for the first time since March,“ Glassnode explained commenting on the data on Twitter.

„Historically, these have been periods characterized by a positive momentum indicative of significant price increases for $BTC“.

Woo agreed, adding that difficulty ribbons are „more reliable personal favorites“ among Bitcoin’s price parameters. The analyst said that investors in BTC should prepare for an „excellent Q4 2020.

$145,000 by 2022?

This week, another chart is circulating on Twitter crypto: BitWise’s spot volume currency index.

Tracing the periods in price history when BTC moved from lows to highs in the context of halving cycles, the chart currently shows a strong bullish orientation in BTC/USD, which would lead the asset to an order of magnitude increase during 2021.

If historical behaviour were to recur, the market could be closer to $150,000 than $10,000 by the end of next year.

As reported by Cointelegraph, expectations of Bitcoin’s compliance with a historical precedent and its takeoff from the current range, which has reached its upper limit of $12,500, continue to grow. Factors such as the strength of the US dollar are taming optimism, but they are at odds with network fundamentals, including the difficulty at historic highs.