Bitcoin Is Back Above $21,000, But A Closed Divergence Has Appeared

Bitcoin price has dropped 75% since its peak, the little bit of recovery over the past few days is insignificant compared to the drop. Currently, a closed divergence signal has appeared.

US stocks rallied on Tuesday (June 21) after a difficult week, as the S&P 500 recorded its worst week since 2020. Ending Tuesday’s session, the Dow Jones Industrial Average recorded its worst week since 2020 the best trading session of the month, up 641 points (or 2.15%) to 30,530. The S&P 500 Index also gained the most in June when it jumped 2.45% to 3,764 points. The Nasdaq Composite added 2.51% to 11,069.

Bitcoin continued to build strength on June 21 as Wall Street trading opened, establishing an intraday top at $21,700 before turning down to $20,200 for the time being.

While some traders intend to short Bitcoin at current levels, the general mood among market participants is “wait and see.”

Now let’s take a look at the BTC chart on the 4h time frame, it is clear that the RSI is following an uptrend in favor of the price increase. Today’s high is lower than the 16th’s high, but let’s see if the volume is decreasing, or it can be said that the selling is decreasing.

The RSI shows that today’s top was higher than last week’s high when the weekend sell-off sent Bitcoin prices down.

If divergence is usually an indicator that helps predict a trend reversal, a closed divergence predicts trend continuation. So is the uptrend in favor?

Popular trader, Bierre, is eyeing the 200 moving average (MA) on the 4-hour chart. In his opinion, BTC breaking it within the day would be a sign of strength, which has not been seen in the past several weeks.

To confirm this, we need to wait for signals from US stock traders. When the stock price begins to show signs of recovery, this is also a favorable opportunity for Bitcoin to regain the previous support area that was broken before at $27,000-$28,000. However, if the price returns to the lower level of 20,000 and bounces sharply, this is also not a bad signal for the bulls.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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