Bitcoin price is now back in the mid-$30,000 range after that Quick drop to under $30,000 Support this week. The short-term dip below the support level finally triggered a beneficial bounce, leaving behind a reversal signal that in the past has had god-like consequences.
If the crypto bulls can hold out at current prices by the time the weekly candle closes, there may be a bigger upward movement on the horizon.
Bitcoin price forms a bullish reversal signal over the course of the week
The wild comeback with cryptocurrency in 2021 is now a distant memory Every other penny Bitcoin’s bullish rally from January 1 forward faded into the most recent drop below support.
For months now $30,000 has been held in support. But the bears were able to push the price of the leading cryptocurrency by market cap to Open annually at $28,800.
Related reading | The Missing Component of a Complete Bitcoin Reversal
It was at this important support level that Bitcoin rebounded, and the bulls rebounded Finally able to gain some momentum over the past few days.
The respected attempt by the bulls to resume a larger bullish rally could hold, now that a bullish hammer reversal has formed on the weekly chart. For the signal to be valid, Bitcoin would need to close the week at $34,500 or higher.
A hammer reversal candlestick has preceded each bullish impulse so far | Source: BTCUSD on TradingView.com
Dropping the Hammer on Bears: Exploring the Reversal Signal
The hammer is one hammer Japanese candlestick This indicates a very bearish movement which was mainly repelled by the bulls. The support was broken, but the bulls kept buying anyway – leaving a long wick or hammer handle below the remainder of the candle’s body or head.
A single candle may seem insignificant as a signal, but in retrospect, these were the past things the bears saw before Bitcoin ripped apart. This is the third hammer since Bear Down the market, he can put the final nail in it Bearcoffins.
Related reading | Bitcoin price drops below $30K support, erasing the 2021 rally
Every previous hammer has marked a major bullish impulse in Bitcoin, and every time LMACD The Momentum indicator was in red on the chart, but it is ready to turn up.
The lagging indicator eventually crosses the upside and the top cryptocurrency continues up a few hundred percent – rinse and repeat. After one of the worst monthly “rinses” on record, the market is too Cleared of leverage And the crypto cycle can continue for a long time if there is another bullish crossover.
As the chart above shows, weekly hammers have a lot of leverage, however, they have also failed in the past. There is a green hammer – slightly different from the one shown in the boxes – when Bitcoin touched $6000 in late 2019. However, this false bottom led to Black Thursday, as there were no such signs in sight. It wasn’t until bitcoin retested $10,000 that the next hammer formed and another impulse began.
Featured image from iStockPhoto, Charts from TradingView.com