Bitcoin - bullish divergence

A regular bullish divergence emerges as the death cross* approaches on the above daily chart following an exact 50% correction in price action.

On the 2-day chart below price action lands on the 2-day / 21-week SMA (green line) (actually 42-weeks of data). I use this ratio for a cleaner signal. In the past this SMA has offered strong support - look left.

A new record occurred during this sell off. This is the first time in BTC history the oversold condition period has measured 22-days. The closest I can find that matches this sudden selling pressure is in April of 2014 measuring 14-days.

1st target is $48-50k. Expect a lot of profit taking here. Price action in BTC will likely be very boring until the previous all time high is broken during this consolidation period.


2-day chart:

* Death cross =
1) 50-day SMA (blue line) crossing down the 200-day SMA (red line)

2) price action below the 200-day.

Trade active

Trade active:

The divergence confirmed. Now a higher low in the stochastic RSI can be seen (circled in green below). Momentum is about to surge upward.

1st target is $43k. Target is void if it does not occur before June 20th or around the time of the expected death cross.

Trade active:

Bullish engulfing candle printed on the 3-day chart yesterday across multiple exchanges as price action touches the yearly EMA.

Trade active:

Now that's the weekly candle we like to see. A strong bounce off the yearly EMA.

Comment:

Bitcoin short positions are up 2500% in only 14 days. Look left... A short squeeze is imminent. Expect resistance around $48-50k.

Trade active:

If you're having a bit of a panic - your emotions are serving you well. Leaving that to one side, have a look, the divergence is alive and well:

With each lower low (LL) in price action a higher low (HL) in the RSI is printed.

It would not surprise me the folks now selling into a bullish divergence are the same ones buying into a bearish divergence at $60k - hey ho - that's the 95% for you.

Comment:

PS: The green dotted line is the annual EMA. If a candle closes under here it's game over. At least 4 months of recovery before accumulation. That's the bearish.

The bullish is price action falls to $20k like so many are now calling for. Okay, price collapses to $20k. However it is equally probable price action increases to $80-110k by the year end. Risk losing $10k to make $70k, that's the odds you want.

Comment:

On the 8hr chart price action returns to the bottom half of the megaphone channel with a 'incredible buy' indication.

Price action is also outside the Bollinger Band, 95% all price action is within.

Trade active:

Another higher low in RSI was printed yesterday following the sell off. Two things are notable:

1) The volume that came in at $30k for this higher low was significant. (yellow circles). Look left at these levels and compared with price action.

2) The bullish divergence is now over 1-month old. The older it becomes the stronger it gets.

Expecting to test the upper channel (4) next, $40-41k. A lot of folks will be looking to short here for anticipation of a lower low. Be careful. Short positions on BTC_short have sky rocketed. The potential for a short squeeze is higher than normal.

Comment:

Be careful - short positions up 900% in the last 10 hours. The herd always get slaughtered. Look left - shorts got wiped out last time pushing up price action. When shorts increase so does price.

Comment:

PS: The short positions now is far greater than the one that pushed price action from $28k to $25k.

Something weird is about to happen.

Comment:

Becoming ridiculous now, 9 oscillators are now showing positive / bullish divergence with price action. Not seen this many since February 2019

February 2019 for comparison:

Trade active:

The bullish divergence continues to become more impressive with each passing week. Higher lows now printing on 10 different oscillators against the price action lower lows. The break should be very impressive.

Comment:

The Bullish divergence continues to grow - good - the longer the better the stronger the signal.

The Bollinger Band mouth is closing. This is an indication a big move is coming. Which way? Who knows. However we now have a bullish divergence growing since mid-May.

Something else that's very interesting on tradingview , the majority of published ideas are not 'short', hard to believe. A 50%+ drop in price action and folks now go short?! Remember 90% of traders will lose money.

Trade closed manually:

The Bullish divergence appears to have failed. Will need to see what the remainder of the month brings to know for sure.

At this moment in time Bitcoin is -30% less than the year began. As far as I can tell this is the first time in a bull market year to date BTC is worth less during a bull market (until recently). That's quite a statement.