Bitcoin’s Correction and Promising Indicators
Bitcoin (BTC) recently saw a correction in its value, yet it continues to trade below the $30,000 mark. Despite this correction, technical indicators are hinting at a potential rally based on historical price patterns.
A Rare Occurrence: MACD’s Bullish Cross
An anonymous cryptocurrency analyst, known as Thescalpingpro, highlighted in a recent X (formerly Twitter) post on October 15 that Bitcoin’s Moving Average Convergence Divergence (MACD) indicator has just witnessed its second-ever bullish cross after dipping below the zero line.
This event is historically significant, as it previously occurred only in 2016, leading to a substantial bull run and a significant increase in Bitcoin’s price the following year.
Thescalpingpro explained, “A strong MACD Bullish Cross occurs when it crosses below the zero line. In 2016, MACD crossed bullish below the zero line for the first time ever, triggering a bull run. Currently, in 2023, MACD crossed bullish below the zero line for the second time.”
Expectations for Short-Term Fluctuations
While Bitcoin seems to be targeting the $27,000 level, the MACD indicator signals long-term trends. However, it’s important to note that short-term fluctuations are normal. Investors should be prepared for price oscillations and sideways movement before a potential rally takes shape.
Thescalpingpro offered a word of caution, stating, “Remember, while MACD signals long-term trend change, short-term fluctuations are normal. Prices might move sideways or even go slightly lower on the LTF before the Bull Run begins.”
External Factors at Play
While technical indicators play a crucial role in Bitcoin’s valuation, it must contend with external factors, including macroeconomic elements and regulatory developments. Of particular note is the awaited approval of a spot Exchange-Traded Fund (ETF) by the Securities and Exchange Commission (SEC).
For now, the potential for a bull run could reignite if Bitcoin can secure a sustained close above $28,233.
Bitcoin’s Current Status
As of the time of writing, Bitcoin is trading at $26,898, representing a nearly 4% decline on the weekly chart.
From a technical analysis perspective, Bitcoin currently leans towards a bearish sentiment. On a one-day summary from TradingView, a ‘sell’ rating stands at 14. Moving averages indicate a ‘strong sell’ at 12, while oscillators signal a ‘buy’ at 4.
Based on recent price movements, Bitcoin’s potential to reach new all-time highs hinges on its ability to maintain a price above the $27,000 resistance level.