Here's your checklist before turning on your inner bull
1. Bitcoin is still in a downtrend since topping out in late June of 2019 - lower highs followed by lowers lows. Seeing a higher high and yet another higher low could be the first sign of a trend reversal.
2. Our Delphi momentum indicator is still in the bearish control zone on the weekly chart. (Just look how nicely it caught the bottom at around 3K)
3. Bullish trends always play out if Bitcoin stays above the 200d SMA. So, it needs to get back above and stay above.
4. Same goes for the 21w SMA. All bullish price movements happen when Bitcoin is above it.
5. Has left the pitchfork downward channel to establish an new trend.
6. The weekly RSI must enter the bullish zone.
At this point, it should be mentioned that we already have a triple (!!) hidden bearish divergence.
7. Breaking the trendline established at the ATH and staying above would be a good sign, obviously.
8. And last but not least, here's the pattern most people don't (want) to see. Let's connect the dots of this series of higher local highs in conjunction with the last 2 higher lows and extrapolate the lines. Does look familiar? Yes, it could be an ascending broadening wedge (aka megaphone) with room for one more touch at around 9.1K before harshly reversing to the downside. The top heaviness of the current implies just that. If the 7.7K to 7.5K region fails to support, we'll most likely see a measured move play out to a new lower low. Keep in mind though, it is possible to have it reversed in a bullish pattern, whereas we 'only' fall to the bottom of the megaphone (right now lining up nicely with the golden pocket retracement) before rising higher.
2. Our Delphi momentum indicator is still in the bearish control zone on the weekly chart. (Just look how nicely it caught the bottom at around 3K)
3. Bullish trends always play out if Bitcoin stays above the 200d SMA. So, it needs to get back above and stay above.
4. Same goes for the 21w SMA. All bullish price movements happen when Bitcoin is above it.
5. Has left the pitchfork downward channel to establish an new trend.
6. The weekly RSI must enter the bullish zone.
At this point, it should be mentioned that we already have a triple (!!) hidden bearish divergence.
7. Breaking the trendline established at the ATH and staying above would be a good sign, obviously.
8. And last but not least, here's the pattern most people don't (want) to see. Let's connect the dots of this series of higher local highs in conjunction with the last 2 higher lows and extrapolate the lines. Does look familiar? Yes, it could be an ascending broadening wedge (aka megaphone) with room for one more touch at around 9.1K before harshly reversing to the downside. The top heaviness of the current implies just that. If the 7.7K to 7.5K region fails to support, we'll most likely see a measured move play out to a new lower low. Keep in mind though, it is possible to have it reversed in a bullish pattern, whereas we 'only' fall to the bottom of the megaphone (right now lining up nicely with the golden pocket retracement) before rising higher.
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