So what? Bitcoin is going to the moon right? Sure – but to get there it needs to experience a correction from time to time. Think of it as breathing out (price goes down) before breathing in again (price goes up). A correction is only healthy and allows bitcoin the opportunity to continue upwards.
If the divergence is still visible once the next weekly candle closes it could signal the start of a larger correction.
The last time we saw divergence on the weekly chart it led to a 72% drop. If the same thing were to happen, this would see the price drop to
-First support between $32,000 - $38,000 (44% drop)
- Second support between $16,000 - $20,000 (72% drop)
These are the only two weekly support areas we have since breaking through the previous all time high.
Do I think we will fall to $16,000 – No.
Should we have a plan in case we do – Absolutely.
This idea is not about spreading fear, nor do I think this will happen BUT when trading you should expect the unexpected, and have a plan for every scenario.
I’m ready, are you?