Bitcoin (BTC) has found itself in the midst of a heavy lull. The cryptocurrency is down a mere 1% in the past 24 hours. This effective non-action has left some analysts stumped as to where the BTC price will head next, especially due to the micro-rallies and micro-crashes that have been observed over the past few weeks.
According to CryptoHamster, a popular trader, some short-term downside is likely. He remarked in a recent tweet that BTC has seen bearish divergences form on the one-hour time frame with the Stochastic, Stochastic Relative Strength Index, and Moving Average Convergence Divergence all trend higher while BTC has fallen, signaling weakness.
Bearish divergence on a 1h time frame with Stochastic, Stochastic RSI, and MACD.
(Not perfect though.)$BTC #bitcoin $BTCUSD pic.twitter.com/rBhXEUOwH2— CryptoHamster (@CryptoHamsterIO) November 8, 2019
While divergences may seem like an abstract concept for readers, the important thing to know is that they have been playing out extremely well for Bitcoin over the past few days. In fact, CryptoHamster’s observation of these technical signals has allowed him to call a number of short-term price moves to a high level of accuracy.
Hamster isn’t the only one preparing for a price pullback.
Analyst Data Dater recently drew attention to a few signs that imply BTC will soon take a breather, which will be a move that will see the cryptocurrency head back into the $8,000s. He noted that indicators are “approaching overbought” on the four-hour, six-hour, and 12-hour charts, while the one-day chart and the two-hour chart are already flashing overbought signals.
Market Update:
1/ Approaching overbought on 4H, 6H, 12H.
2/ Overbought on 1D, 2H.
3/ Approaching overbought on 2D, 3D.4/ Bitmex Funding very high for three consecutive periods.
5/ QA indicator turned blue (overbought). pic.twitter.com/ibbmf6xQA7
— goop (@16goop) November 5, 2019
Bitcoin Bulls Still Have a Grip
While a short-term pullback is possible, the medium-term chart is still purportedly leaning in the favor of bulls.
Crypto Thies recently pointed out that Bitcoin is currently looking rather positive as the volume moving average implies incoming volatility. In the chart below, he showed that when BTC bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average.
As soon as $BTC bounced off of the .618, many should have started hoarding #bitcoin like it was …well, Bitcoin.$BTC Bears beware…you may not want to short this next 'attempted' pump
As price sits at $9.4k as of this post, my notes below highlight what to expect in Nov/Dec pic.twitter.com/XfBE6Kf0Yz
— Eric Thies (@kingthies) November 6, 2019
He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.
Photo by zhao chen on Unsplash