A technical signal that has appeared only three times in 15 years — and coincided with a major Bitcoin bottom on each occasion — is set to complete on August 31, according to analyst Velez.

Understanding the Signal

The indicator tracks Bitcoin's relative performance against equities. When the chart rises, Bitcoin is losing ground to stocks; when it falls, Bitcoin is outperforming. This divergence matters because Bitcoin has historically moved in correlation with risk assets like equities during periods of stress, so sustained underperformance can signal that selling pressure is approaching exhaustion rather than reflecting a broader risk-off environment.

The critical pattern consists of three consecutive rising bars on a four-month chart, with each bar printing a higher high than the one before it. This specific formation has emerged only three times over the past 15 years. On every prior occasion when it completed, Bitcoin was at or near a major cyclical low.

Why August 31 Matters

A fourth instance of the sequence is now in progress. The first bar closed in December, the second in April, and the third is currently live. Because it has already printed a higher high than the preceding bar, the pattern will complete regardless of subsequent price action.

The bar officially closes on August 31. Bitcoin's price on that date will add a fourth entry to the historical sequence. At present, that figure stands near $65,000.

Failure Conditions

Velez outlined the failure condition in clear terms: if the next bar — covering the September-through-December period — closes green, it would indicate that Bitcoin continued losing ground to stocks past the exact point where the pattern has historically reversed.

Such an outcome would represent the first time this signal has failed in 15 years. The test is straightforward: a single bar, a single color, verifiable by anyone once December 31 closes.

Supporting On-Chain and Market Data

Bitcoin closed the past week at $65,050, gaining 3.6% and holding above its 200-week moving average — a widely followed long-term technical benchmark that has historically separated bear-market territory from recovery phases in prior cycles. This resilience came despite the absence of a Clarity Act vote — referring to pending U.S. legislation aimed at clarifying the regulatory treatment of digital assets — and a major hardware wallet exploit that unsettled markets during the same period.

Spot Bitcoin ETF inflows reached $865.3 million for the week, marking the strongest five-session stretch since June. Since their approval by U.S. regulators in January 2024, spot Bitcoin ETFs have become one of the primary channels through which institutional capital flows into Bitcoin, making weekly flow data a closely watched gauge of demand. BlackRock's IBIT accounted for approximately 80% of the total.

Exchange balances have fallen to a seven-year low, while long-term holder supply stands at an all-time high. Declining exchange balances typically indicate that holders are withdrawing coins to self-custody or cold storage, reducing the liquid supply available for sale. According to Velez, every major institutional seller sold into the decline, yet the price refused to break lower.

As Velez put it: the buyers did not rescue the market — the sellers simply ran out.