Bitcoin price is back close to $ 50,000 in a flash after retesting the rounded $ 40,000 support several times, which remains strong. The extremely bearish sentiment due to Evergrande, a rising dollar and more left the market in extreme fear and anticipation for the worst.
The sudden spike sent Bitcoin price up more than 10% from wick to wick, but tech specs might suggest this is the start of something more. But before the bulls are clear, there is a sustained bearish counter-signal that needs to be debunked before a major rally can occur.
The top cryptocurrency took a surprising step this morning | Source: BTCUSD on TradingView.com
Bitcoin accumulates 10% intraday from wick to wick
A scary fractal resembling Black Thursday has popped up in the Bitcoin price action, which also has certain characteristics of the Wyckoff redistribution. At the same time, the leading cryptocurrency is holding high timeframe resistance that has become support and could break out of a bull flag.
The indecision is felt in the mood, which has resulted in a confused community that is at odds depending on the trading side.
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Short positions valued at 47 million. A target this lofty sounds shocking, but given the parabolic base structure in Bitcoin, it’s not impossible.
And it could all start now, if a bearish divergence can be debunked before it is confirmed.
Cops have to watch out for the bear div this weekend | Source: BTCUSD on TradingView.com
Bearish divergence warns of possible retest but depends on bullish momentum
The bearish divergence is at the daily RSI, but if there is enough strength, Bitcoin price will break through and it will become invalid. However, eager bulls should be wary of another crash due to the signal that could ultimately retest the bull flag breakout if the resistance became support.
The bull scenario may be more likely based on other signals. The LMACD has been crossed bullishly and the daily RSI bounced off a descending trendline flowing from above.
Related reading | Could a Bitcoin Bull Flag blind bears?
Bitcoin price has also tapped Parabolic SAR in the daily timeframe, but the volume has not yet arrived, which could indicate a possible fake or support the bearish divergence theory.
It all boils down to the fact that everyone who takes a position now has to be careful – at least until there is more clarity about the direction. Exceeding $ 53,000 in the daily timeframe should prepare the top cryptocurrency for a pump towards the current ATH, which may not stop immediately once it gets there.
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Featured image from iStockPhoto, charts from TradingView.com