Bitcoin can no longer be stopped from Q2 2020, take the asset to a new record level and restoring interest and bullish momentum in the cryptocurrency market.
But as the most dominant crypto asset in the space continues to rise with very few corrections in between, ten of the most used technical indicators are now sending bearish signals, through a divergence between the tool and the price action. This is why it could trigger the first major cryptocurrency since Black Thursday.
2020 reminder: the year of the pandemic and Bitcoin emerging as a store of value
The year 2020 started on a positive note for crypto, bringing Bitcoin from $ 6,000 to just over $ 10,000 at the end of February. The stock market had set a new record level and things were looking good in the new year.
But then the pandemic struck, which caused widespread panic about the impact on the economy, and with it a sell-out of epic proportions. Stocks plummeted, gold plummeted and Bitcoin lost more than 60% of its value in a month later.
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The rest of the crypto space was even more devastated, but out of the rubble the phoenix rose again, and the asset is not only trading higher than then, but from a sharp move to less than $ 4,000 it actively did a 5x and revisited its former peak around $ 20,000.
Along the way, which coincided with the unprecedented printing of fiat currency, the value story has taken over the cryptocurrency and made it attractive for the first time to institutional investors and hedge funds.
But revisiting ATH resistance could bring the first major correction since Black Thursday. After such a sharp rise, a correction would be healthy and the indicators could be reset. Currently, ten individual technical indicators are all giving bearish divergence signals, potentially warning of the first real crash for the top crypto.
Ten different technical indicators are issuing warnings with bearish signals | Source: BTCUSD on TradingView.com
Ten bearish divergences could cut crypto valuations in half, too late to contain bulls
According to a pseudonymous crypto analystTen unique technical analysis indicators deliver a bearish divergence sell signal. Bearish divergences occur when the price action is opposite to the technical indicator in question – or all ten in this case.
The indicators included in the analysis are the MACD, Volume on balance, Stochastic, Klinger, Relative Strength Index, Stoch RSI and more. Even more obscure crypto analysis tools, including the Elder Force Index, Fisher Transform, Money Flow Index and TTM Squeeze are also sending the bearish signal.
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As pictured above, all indicators hit a lower high, which set price action not only a higher high but also a new record for the cryptocurrency.
The only thing that invalidates a bearish divergence, is a rise higher which forms a higher height, and completely removing the divergence from the graph. The alternative is that Bitcoin will start to falter and eventually topple to restore support below.
Featured image from Deposit Photos, Charts from TradingView.com