Bitcoin Price Forms Bullish Reversal Signal On Weekly

Bitcoin Price Forms Bullish Reversal Signal On Weekly

Bitcoin Bulls Bring Out Hammer Of Thor Reversal, But Support Must Hold.

    Bitcoin price is back now at the mid $30,000 range after a quick plunge below $30,000 support this week. The short-lived dip below support finally resulted in a worthwhile bounce, leaving behind a reversal signal that in the past has had god-like resultsIf crypto bulls can hold at current prices by the time the weekly candle closes, a larger upward move could be on the horizon.

    The wild returns across crypto in 2021 are now a distant memory, having every last penny of the Bitcoin bull run from January 1 forward wiped out in the most recent drop below support. For months now $30,000 has held as support. But bears were able to push the price of the leading cryptocurrency by market cap to the yearly open at $28,800.

    A hammer is a single Japanese candlestick that shows an extremely bearish move that was essentially blocked by bulls. Support was breached, but bulls kept on buying anyway – leaving a long wick or hammer handle below what’s left of the candle body or head.

    A single candle might seem insignificant as a signal, but in the past, it was the past things bears saw before Bitcoin went on a tear. This third hammer since the bear market bottom could put the final nail in the bear’s coffins. Each previous hammer marked a major bullish impulse brewing in Bitcoin, and each time the LMACD – a momentum indicator was red on the histogram but ready to turn upward.

    The lagging indicator eventually crosses bullish and the top cryptocurrency goes on a few hundred percent rally – rinse and repeat. After one of the worst monthly “rinses” on record, the market is cleansed of leverage and it could keep the crypto cycle going a while longer if there’s another bullish crossover.

    As the chart above shows, hammers on the weekly have a lot of clouts, however, they have also failed in the past. There’s a green hammer – slightly different from those outlined in boxes – when Bitcoin touched $6,000 in late 2019. However, this false bottom led to Black Thursday, where there were no such signals in sight. It wasn’t again until Bitcoin held a retest of $10,000 that the next hammer formed and another impulse began.

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