3 huge trends are showing that Bitcoin could bounce back after the recent $1000 drop as the cryptocurrency saw a slight recovery since the lows hit at $11,400. The asset is now trading for $11,600 as of the time of writing but BTC is still about $1000 lower since the last high of $12,500 so let’ take a closer look at the price analysis in our Bitcoin news.
The cryptocurrency could soon bounce further as the 3 huge trends suggest. These technicals don’t indicate that Bitcoin is ready to set a new year-to-date high above the $12,500. One analyst said that there are three pivotal signs that show bitcoin could bounce after retracting $1000 from the Monday highs. By looking at the charts we can see the signs:
- Bitcoin broke a huge textbook falling wedge pattern which is usually a bullish sign
- The six-hour MACD formed a bullish divergence
- The willy indicator reset to low levels after indicating that the cryptocurrency was oversold
The short-term setup could pan out as many analysts believe that bitcoin will consolidate in the current range in the upcoming days or weeks. This doesn’t mean that Bitcoin is not in macro bull trend it’s just that analysts believe cryptocurrency has to cool down. One trader shared the chart where it shows that bitcoin is forming the same on-day bearish divergence against the RSI index that was seen last during the consolidation period of the May highs.
Both periods of consolidation and ongoing one and the one from May to July, have similar structures. Commenting on the divergence, the trader said:
“RSI Divergence peeps, what are your thoughts on the big daily bear div on Bitcoin? I don’t use RSI but looks like we had a bear div during the last consolidation as well.”
Bitcoin is following a similar path that it last took after the last divergence was formed which means that it will consolidate in the $11,000 and $12,000 range for the coming two months. Whether or not the number one cryptocurrency goes higher after the consolidation, it’s not 100% certain as there are many risks that Bitcoin could rally against the US dollar soon.
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