Bitcoin Faces Another Rejection, But Here’s Why the Bull Case Remains Strong
Bitcoin has fallen into a bearish pattern of incurring major upwards movements that are followed by nearly instant rejections, which leaves behind large wicks on BTC’s candle chart and typically spells trouble for which direction it trends in the near-term.
Yesterday, Bitcoin further extended this pattern after it incurred a fleeting surge up to highs of nearly $7,500 on popular trading platforms like BitMEX, with this movement nearly instantly retracing all the way back down to where it started.
In spite of this bearish movement, analysts are noting that the bull case may not be nullified yet, as one historically accurate technical factor signals that Bitcoin may soon see some much-needed bullishness.
Bitcoin Stuck at $7,200 Following Fleeting Movement
At the time of writing, Bitcoin is trading down roughly 1% at its current price of $7,225, which marks a notable decline from its daily highs of $7,500 that were set during yesterday’s brief upwards movement.
Over the past couple of days, BTC has been able to find a decent amount of support around $7,200, although it remains unclear as to just how long this support will last as bears continue gaining an edge over bulls.
While looking at Bitcoin’s daily chart, Scott Melker – a popular cryptocurrency analyst who goes by the name “The Wolf of All Streets” – explained that bull divergence could mean that the current lows will mark a mid-term bottom for the crypto.
“I bought Bitcoin again. We have a potential bull div now on the DAILY chart (call me in 22 hours) and lower time frames. Also, price just wicked below the previous swing low and bounced a bit – bullish SFP?” He explained while pointing to the chart below.
Analyst: Bullish BTC Divergence Confirmed on Lower Time Frames as Well
Further enhancing the bullish sentiment that Melker discusses above is the fact that that Bitcoin is expressing similarly bullish price divergences on shorter time frames as well, including its 4-hour chart.
“We now have a confirmed 4 hour bull div as well. I love seeing lower time frame divs confirmed on higher time frames. Daily next? Es possible,” Melker noted.
The bullishness currently seen on multiple time frames may give Bitcoin’s bulls some much needed relief in the near-term, although this possibility will only be confirmed if the cryptocurrency is able to see some upwards momentum.
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