Bitcoin's Bull Run Stalls as Technical Indicators Flash Warning Signs
Bitcoin, the leading cryptocurrency by market value, is currently trading near $108,000, testing the bullish trendline that has characterized its sharp rise from $75K to record highs over $110K. However, the bullish momentum appears to be stalling, with emerging technical signals pointing to a possible price pullback.
Key Momentum Indicator Shows Bearish Divergence
A critical momentum indicator, the 30-day rate of change (ROC), has chalked out a bearish divergence. This pattern occurs when an asset's price rises, but momentum indicators fail to confirm the same, hinting at potential weakness and price correction. Despite recent price rises, the 30-day ROC is forming lower highs, signaling weakening momentum.
MACD Histogram Flips Negative
The daily chart moving average convergence divergence (MACD) histogram, an indicator widely used to gauge trend strength and changes, has flipped negative, indicating a bearish shift in momentum. This development suggests that BTC could dive out of the bullish ascending channel, potentially revisiting the major psychological resistance-turned-support at $100,000.
Broader Outlook Remains Constructive
Despite these short-term bearish signals, the broader outlook for Bitcoin remains constructive. This is consistent with the recent golden cross of the 50- and 200-day simple moving averages (SMAs), a bullish signal that often precedes further price gains.
What to Watch
- Bitcoin's price action around the $100,000 support level.
- Further developments in the 30-day ROC and MACD indicators.
- Market sentiment and external factors that could influence Bitcoin's price trajectory.
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