Bullish Confluence Signal: INACTIVE 📊
Historical Signal Performance
Bullish Confluence Signal & Bitcoin Price
Understanding the Bullish Confluence Signal Chart
This chart displays Bitcoin price alongside bullish confluence signal activations. Each signal point is color-coded based on its forward performance, with shaded areas showing the 90-day and 180-day forward return periods.
- Green Signal Points: Signals that generated positive returns over the measured period
- Red Signal Points: Signals that generated negative returns (rare but important for context)
- Signal Timing: All signals are historically tested with actual forward performance data
- Forward Periods: Shaded areas show the 90-day (light green) and 180-day (light blue) periods following each signal
The signal has generated an average 90-day return of 29.1% and 180-day return of 77.7% across 10 completed signals.
Signal Component Analysis
Understanding the Signal Components
The bullish confluence signal combines three key metrics. This chart shows the actual values (not percentiles) for better understanding of market conditions:
- IV Percentile < 30th percentile: Low volatility environment indicates market complacency and often precedes major moves
- Put/Call Ratio < 30th percentile: Low fear levels suggest reduced protective positioning and bullish sentiment
- Volume Percentile > 70th percentile: High activity confirms significant market participation and conviction
The signal requires all three conditions to be met simultaneously for maximum effectiveness. This combination identifies periods of low volatility, low fear, and high activity - historically optimal conditions for Bitcoin uptrends.
Comprehensive Guide to Bullish Confluence Signal Analysis
What is the Bullish Confluence Signal?
The Bullish Confluence Signal identifies optimal Bitcoin entry points by combining three historically proven options market indicators using percentile ranking. This approach ensures consistent signal generation regardless of changing market conditions, as each metric is evaluated relative to its own historical distribution rather than fixed thresholds.
Signal Construction Methodology
Each component is ranked as a percentile against its historical distribution, providing consistent context regardless of absolute values:
- Implied Volatility Percentile < 30th: Current volatility is lower than 70% of historical observations
- Put/Call Ratio Percentile < 30th: Current fear levels are lower than 70% of historical observations
- Volume Percentile > 70th: Current volume is higher than 70% of historical observations
Why This Combination Works
Low IV + Low Put/Call + High Volume = Bullish Setup
This combination indicates: (1) Market complacency with IV below the 30th percentile creating opportunity, (2) Reduced fear with put/call ratio below the 30th percentile showing minimal protective positioning, (3) High conviction from volume above the 70th percentile confirming significant market participation. Historically, this confluence has preceded major uptrends in Bitcoin.
Practical Applications
For Long-Term Investors
Use signal activations as primary entry points for building Bitcoin positions. The 77.7% average 180-day return suggests strong medium-term performance following signals.
For Active Traders
Combine with technical analysis for timing precision. The signal provides fundamental options market context while charts provide entry/exit execution guidance.
For Options Traders
Signal activations often mark optimal times for long-dated call strategies or protective put sales, taking advantage of the low IV environment while positioning for the anticipated uptrend.
Key Performance Insights
Based on 10 completed signals: Average 90-day return of 29.1% with 80.0% win rate, and 180-day return of 77.7% with 90.0% win rate. The signal's strength lies in its risk-adjusted returns and timing precision.
Important Considerations
- Signal Frequency: Confluence signals are relatively rare, occurring only when all three percentile conditions align
- Percentile Approach: Using percentiles ensures signal consistency across different market cycles and volatility regimes
- Binary Nature: The signal is either active (all conditions met) or inactive - there are no partial signals