Bitcoin

Daily Bitcoin Dragonfly Doji Gives Bulls Hope for Sharp Reversal


Bitcoin price It is now up $6000 from yesterday’s low in a jiffy. A long wick below the support is now left behind, forming a Japanese candlestick formation called the Dragonfly Doji. With a huge following by the crypto bulls already, a daily close above $36,000 could leave a reversal pattern behind on the charts.

But how far can a previously trending cryptocurrency go up if it can find a bottom? And is this a dead cat, or is a full recovery due to a bull market the masses have been waiting for?

Will the Dragonfly Doji of the Day Let Bitcoin Fly Again?

Although many cryptocurrency investors are quick to write Technical Analysis Like magic or more than just a guessing game, there is real technology to it.

When done correctly, there are strict rules to follow that confirm the signals along with statistics that show what kind of results to expect from the behavior. Studies have been done on chart patterns أنماطAnd indicators and more – right up to the candlestick.

Related reading | What could the final stage of the bitcoin bull market look like

study Japanese candles Basic as it is, but this does not diminish its effectiveness. The open, close, low and high of each candle can provide all kinds of information about the market and what to expect.

For example, the dragonfly doji on the daily Bitcoin charts by itself is enough to indicate that a reversal has finally occurred here. With the bullish follow today, a more notable reversal pattern is also forming.

A dragonfly doji could lead to the completion of a reversal pattern | Source: BTCUSD on TradingView.com

What can a reversal pattern mean for cryptocurrencies

With a dragonfly doji pattern on the daily newspaper and TD 9 . buy signal On the weekly time frame, the Bitcoin bulls need to hold out until the close of the weekly candlestick on Sunday and a reversal looks more likely.

The dragonfly doji mentioned above is the central point of a Morning star reflection pattern in making. If the bulls can close out the daily candle for today and continue until tomorrow, a more general bullish move is likely.

Related reading | Time to Pay Attention: Bitcoin Index Behavior Mimics Historic Rally

The resistances at $40,000 and $48,000 are both potential stops before the $50,000 recovery. Above $50,000 should result in a retest of the previous highs and if broken, the bottom of this bullish correction will be set at $30K.

At this point, it would be time to go back to trying Catch up with the top of the market cycle, wherever it ends up. It could all start with a dragonfly doji on the daily time frames.

Featured image from iStockPhoto, Charts from TradingView.com



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