Bitcoin Price Indicator Turns Bullish for First Time in 8 Months
Bitcoin's weekly MACD indicator has risen above zero for the first time since January, confirming a long-term bearish-to-bullish trend change.
Sep 4, 2018 at 11:05 a.m. UTC
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The list of indicators signaling a long-term bullish reversal in bitcoin (BTC) continues to grow with each passing week.
The latest to join the list is the MACD histogram, which has moved above zero – turned bullish – for the first time since January. The MACD, which oscillates above and below the zero line, is one of the most popular technical indicators used to determine a trend's reversal and momentum.
A bearish-to-bullish trend change is confirmed when the histogram moves above the zero line. On the other hand, a bearish reversal is confirmed when it dips below zero.
The bullish turn of the MACD adds credence to BTC's strong defense of the psychological support of $6,000 in the last 10 weeks.
Further, it validates bearish exhaustion indicated by BTC's long-tailed monthly candle and the record low net shorts in the BTC futures market.
At press time, BTC is trading at $7,320 on Bitfinex, representing a 0.8 percent appreciation on a 24-hour basis.
BTC weekly chart
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As seen in the chart above, the histogram has moved above the zero line for the first time since January. More importantly, the bullish turn in the MACD is accompanied by a falling channel breakout (bullish pattern).
So, it seems safe to say that the outlook as per the weekly chart is bullish. As a result, BTC could explore the upside towards the July highs above $8,500 in the next few weeks.
While the long-term picture is looking rosy, the cryptocurrency could drop to $7,000 (psychological support) in the next day or two, if the wedge pattern seen in the chart below ends with a downside break.
4-hour chart
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The rising trendline has been breached, so BTC could dip below the wedge support of $7,230 in the next few hours.
On the other hand, a high volume bullish breakout would signal a continuation of the rally from the August low of $5,859.
View
- A combination of the falling channel breakout and the bullish weekly MACD indicates scope for a rally to the July highs above $8,500.
- For the next 24 hours, the investors need to keep an eye on the pennant pattern seen in the 4-hour chart. A bullish breakout could yield a rally to $7,500, while a downside break would shift risk in favor of a drop to $7,000.
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Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; Charts by Trading View
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