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Sunday, January 22, 2023

Is Bitcoin bear market over?

Is Bitcoin bear market over?

Bitcoin / U.S. dollar BITSTAMP:BTCUSD

Hi Crypto community!

Today I am sharing my idea with a view on the most recent Bitcoin upside run. There is a lot of sentiment in the market where's people believe that Bitcoin bear market is over.

Rather than voicing my personal biased opinion, I would like to analyse the Bitcoin price chart, see what it is doing and share some facts about a potential trend change. Will it be only the short-term bear market rally (bull trap) or a global trend reversal after hitting the bottom, no one knows. However, I will break down my technical analysis and show you a few signals indicating that there could be a change in direction.

As we are working with probabilities and nothing is 100%, the best way is not to rely too much on the past history but observe the markets for the next week weeks. They could be very crucial either to confirm if the Bitcoin price trend has changed and what action to take.

Okay, let's get started!

RSI Indicator on a weekly timeframe - it has broke its year long downtrend with an impulsive move above the "white" resisitance downtrend line. After moving away from its lower band, the RSI could be indicating a potential trend change. A very similar scenario happened twice in 2019 & 2020. This gives more probability to the upside move.

21 EMA (purple line) on a weekly timeframe - Bitcoin price has broke above it and remains there for the second week. Last time this happened in 2019 when Bitcoin price changed its direction and confirmed that the bottom was in. It is very important to watch this week the weekly Bitcoin candle closure and see if it will remains above or drops below the 21 EMA indicator. If the weekly candle closes above, then the odds could be in favour for the trend change.
But yet, we would need to monitor crypto markets for the next few weeks which could be important and giving us some more clues.

200 DMA (green line) on a weekly timeframe - the price of Bitcoin could continue its short term rally up to this moving average line and reach around $24,500-$25,000. There we could see some strong resistance and ,perhaps, a downside correction. What would happen next, we would need to wait and see. Potentially, Bitcoin price could break through 200 DMA and continue its move up to $30,000 level whilst closing its CME gaps at around $26,000 and $28,000.

During the last bear market in 2018-2019, it took Bitcoin 68 weeks from its ATH to bottom out and then break eventually above its 21 EMA . If we look at the current bear market, the Bitcoin price broke above 21 EMA in only 62 weeks. Could this indicate that the bottom has already been at $16,000 level or we have another 6-8 weeks left for the Bitcoin capitulation to occur?

One again, I don't know, no one knows or can predict the bottom.

All I will be doing is watching Bitcoin price action for the next few weeks to see what it does.

Today, I am bringing to your attention that there could be a potential change in price direction which could be confirmed or fail in the next few weeks.

In my next ideas posts I will give you some valid reasons why I think this might be a fake rally to liquidate all short positions before capitulating further down.

Will be interesting to see how its all will play out.

No matter what direction Bitcoin will take in the near future, I am still following my best investment strategy that suits both scenarios - downside and upside.

This will be shared in my next week ideas.

Don't forget to like and follow for my latest updates and ideas.

You can also find me on Twitter @newbitcoinuser1

Stay Crypto and be patient.

Via TradingView Ideas

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