Currently, bitcoin is in a downtrend, and I am going to support my idea using the weekly RSI because I believe that divergence is a strong indicator of a changing trend. In this graph, I have noted the divergences that have occurred in bitcoin during the weekly time frame. However, as you can see there I have made the bearish divergence in red and the bullish divergence in yellow, and they both mark essentially the point of the long term reversal that have occurred. It is in my strong opinion, that a weekly bullish divergence would occur in the weekly RSI sometime in the future to mark an honest market reversal. It would make sense, because the only way to negate or cancel out a divergence in a specific time frame is another divergence in the same time frame. IT is also important to note that it is not essential that it does form a divergence, but it would be a strong indicator of a trend change. For instance, during this last movement up the (10k move in April) there was a bearish divergence that occurred on the daily candle sticks, and during its reversal that was also a bullish divergence on the daily candle sticks. However, I do believe there was no divergences on the last two movements downwards, the one in February, and March (the v bottom and the symmetrical triangle bottom, respectively). Given the time frame and the magnitude of the bullish divergence in yellow, it makes sense that we have entered a long term bull market because, there has been a strong set up for a bull rally for weeks prior to the actual start of the bull rally.
However, it is possible that there is not a bullish divergence to occur on the weekly time frame, I do think that it is a strong possibility that it will.
I like to image RSI divergences as a hidden indicator that a faction whether it be bearish or bullish, is losing control of the current market trend and there is a high possibility of a shifting market trend.
So to note, I do not know the price at which we will bottom on the longer term, but we have bottomed now. Be cautious and take advantages of the different movements despite it being more bearish, trade to your personal style. Also it is possible that this current move is a solid bottom, it just depends on what is to come, but in my opinion, expect to see other downward movements, however, I do not know if they will be at this same bottom 5750 or lower or higher.
This is the bearish divergence that occurred during the peak in 2014. (Also note that I did not use the chart for bitstamp as the main chart because there is no bullish divergence that occurs on it in 2015 or 2016, so it the divergence will also depend on the exchange you are a part of).
However, it is possible that there is not a bullish divergence to occur on the weekly time frame, I do think that it is a strong possibility that it will.
I like to image RSI divergences as a hidden indicator that a faction whether it be bearish or bullish, is losing control of the current market trend and there is a high possibility of a shifting market trend.
So to note, I do not know the price at which we will bottom on the longer term, but we have bottomed now. Be cautious and take advantages of the different movements despite it being more bearish, trade to your personal style. Also it is possible that this current move is a solid bottom, it just depends on what is to come, but in my opinion, expect to see other downward movements, however, I do not know if they will be at this same bottom 5750 or lower or higher.
This is the bearish divergence that occurred during the peak in 2014. (Also note that I did not use the chart for bitstamp as the main chart because there is no bullish divergence that occurs on it in 2015 or 2016, so it the divergence will also depend on the exchange you are a part of).
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