The recent price action in the Bitcoin (BTC) market has seen corrections alongside a hidden bullish divergence pattern, which some believe could be a precursor to a price surge. Let's delve into shakeout patterns, hidden bullish divergence, and why this combination might signal a potential upswing:
Shakeout Patterns:
Purpose: Shakeout patterns are price movements that aim to force leveraged traders out of their positions. This often involves sharp price drops or sudden volatility, causing leveraged traders with losing positions to be liquidated. Impact: By eliminating overleveraged positions, shakeouts can create a healthier market environment with less speculative influence. Hidden Bullish Divergence:
Technical Indicator: This pattern refers to a discrepancy between the price action of an asset and its relative strength index (RSI) indicator. Interpretation: In a hidden bullish divergence, the price makes lower lows while the RSI forms higher lows. This suggests a weakening bearish momentum despite the price decline, potentially indicating an upcoming reversal. The Shakeout and Hidden Bullish Divergence Combo:
The Theory: The idea is that the shakeout targets leveraged short positions (those betting on a price decrease). Once these positions are forced out, the underlying bullish momentum (reflected in the RSI) can take hold, leading to a price increase. Important Considerations:
Not a Guaranteed Signal: While hidden bullish divergence can be a promising indicator, it's not a foolproof guarantee of a price surge. Other factors like overall market sentiment and news events can influence the price direction. Technical Analysis Limitations: Technical analysis should be used in conjunction with other factors for a more comprehensive understanding of the market. Do Your Own Research: Conduct thorough research on Bitcoin's fundamentals, technical indicators, and market trends before making any investment decisions. Disclaimer: I am not a financial advisor, and this information should not be considered financial advice. Always consult with a qualified financial professional before making any investment decisions.
Remember: The cryptocurrency market is inherently volatile, and shakeouts can be nerve-wracking. Develop a sound investment strategy, manage risk effectively, and don't rely solely on technical indicators for making investment decisions.
thanks for breaking down your thoughts on the current btc climate, interesting this time around that we have hit a ATH prior to the halving and the ETF's being a major factor this time around. I've been out the game since 2017 but interesting to see in these times when btc moves the altcoins seem to follow, when it used to be the opposite and everyone sold their positions in alt coins when btc made a surge, any thoughts on why things have changed over the years in regards to the action. thanks ( a new follower )
ParabolicP
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@saywhat the hype around etf an institutions snapping up all the can buy mainly. Also the supply shock of yet another halving. Gold does nothing and btc is coming for golds market cap after surpassing silvers market cap.
I've been out the game since 2017 but interesting to see in these times when btc moves the altcoins seem to follow, when it used to be the opposite and everyone sold their positions in alt coins when btc made a surge,
any thoughts on why things have changed over the years in regards to the action.
thanks ( a new follower )