3 signs that Bitcoin is about to reverse the uptrend
While Bitcoin price isn’t doing much at the time of writing, some charts still seem to be pointing to a bull market. These charts were compiled by the renowned analyst and trader Lark Davis mention how he shares his thoughts on the future price of Bitcoin.
A bullish divergence occurs when price hits a lower low while the Relative Strength Index (RSI) makes a higher low. On May 19th, when the price began to fall, the RSI rose from its oversold position and has continued to rise since then. Such contradicting results represent a bullish divergence on the Bitcoin chart. David emphasized:
“That shows that the market is starting to rise again. According to the indicator, we are on the verge of a recovery in the Bitcoin price. “
Also important here is the 50-day moving average (MA), which should contribute to a bullish reversal.
Bitcoin bullish divergence | source: Lark Davis
Accumulation model Wyckoff
This structure has been a hotly debated topic lately. While the long-term analysis focuses on the Wyckoff distribution pattern, the short-term analysis focuses on the persistent Wyckoff accumulation pattern. Bitcoin has validated Phase A and Phase B and all that remains is a simple test in the lower end of the $ 30,000-33,000 zone to validate Phase C. As mentioned earlier, such a move could help Bitcoin hit the $ 40,000 mark regaining, attaining a Sign of Strength (SOS) and then ascending.
Short-term Wyckoff accumulation pattern | source: Rect capital
Rekt Capital said:
“However, this current small Wyckoff accumulation pattern could allow BTC to rebound to the bottom of the large Wyckoff distribution range in order to make an important trending decision. Overall, this Wyckoff accumulation model can only represent a small fraction of the larger Wyckoff distribution pattern. “
Davis’s final observation relates to Bitcoin’s past bull cycles and its past performance. The blue cycle (cycle 1) represents Bitcoin’s first bull run. The orange line (cycle 2) is the 2013 bull run, the yellow line (cycle 3) is the 2017 bull phase and finally the purple line (cycle 4) marks the current bull cycle.
Additionally, a closer look can tell that as the bull cycle gets longer, the entire bull cycle is now getting shorter. According to Davis:
“The current bull market is significantly shorter than the 2017 bull market, which means that it is very unlikely that this bull cycle will be over.”
For now, BTC could enter some consolidation and then eventually rebound to an ROI in line with previous bull cycles.
Bullish cycles of Bitcoin | source: Benjamin Cowen
According to AMBCrypto