Since plunging all the way to $7,700 last week, Bitcoin has found itself in a lull. The price of the crypto asset has been extremely mild, with BTC trending in the low-$8,000s with a sense of indirection falling over the broader market.
The one-day Bitcoin volatility index on BitMEX, in fact, is starting to “get closer to [the move which precedes] big candle BTC moves,” analyst Chonis observed recently. Indeed, as the chart below shows, Bitcoin’s volatility reading enters that region prior to immense bouts of upward or downward price action.
With Bitcoin seemingly poised to undergo a price breakout, you may be wondering in which direction the cryptocurrency will head?
Well, Ethereum World News will lay out the case for both bulls and bears in this article.
The Bull Argument
Analyst CryptoThies recently drew attention to this signal: a bullish divergence on the crypto market capitalization’s three-day chart.
As he depicted in the tweet that can be seen below, the three-day Stochastic has started to trend higher, seeing higher lows, as the market cap has entered a brief downtrend, seeing lower lows — a bullish divergence that demonstrates that bears are losing control to bulls. Bullish divergences can often mark the end of a downtrend.
That’s not the only sign that bulls are in good company.
An indicator created by Financial Survivalism that is based on the parabolic SAR recently printed a buy signal on the one-day Bitcoin chart, which could be seen as an indication of an impending recovery.
And, macro investor and gold proponent Dan Tapiero recently pointed out that the Bitcoin price chart has printed a massive bull signal. In a tweet, the institutional investor noted that the TD Sequential indicator, which is a time-based technical indicator, has drawn a buy 9 signal.
The Bear Argument
It isn’t all sunshine and rainbows, however. Josh Rager, a prominent analyst, recently noted that Bitcoin’s daily chart doesn’t look pretty, with BTC’s support at $8,000 seemingly poised to see buyers abandon it. Buying volume at $8,000, in fact, continues to decrease — something that may hint at a growing potential for another leg lower.
There is also evidence to suggest that bears are gaining traction from a more medium-term to long-term perspective.
Brave New Coin’s Josh Olszewicz recently observed that the 50-day and 200-day moving averages, which can be interpreted in tandem to discover macro market trends, are converging after Bitcoin’s upward momentum stopped earlier this year. If the 50-day moving average crosses below the 200-day, the crypto market’s total capitalization will print what is known as a “death cross”, a sign that last was seen in April of 2018 — just shy of the market’s top in the last cryptocurrency cycle.