Firstly, let me start by saying that exhaustion in price action does not mean reversal.
On strong momentum moves, the smallest pullback can ‘reset’ fairly quickly, so this is not a fear-mongering update at all, just an observation.
Personally, I’m in the buy-and-hold camp when it comes to BTC because I don’t have the appetite to trade it short-term, but for those who do these type of market signals are usually worthwhile looking into.
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On the weekly, we’ve seen a gnarly looking bearish divergence for BTC.
And we are seeing the same play out on the daily as well…
After the recent run higher, it should not come as a surprise that some participants will be looking to take some profit off the table.
The big question with this type of divergence is whether it signals a short-term shake-out, or a deeper and more uncomfortable pullback.
As always, that part is up for debate and depends on which side of the bias spectrum you look from. For the bulls, as a minimum, should spark some questions on whether more profit taking should be considered.
For the bears, key support comes in around 112K. If that folds the next key support only comes in around the 101K mark.
I’m not here to tell you which way it’ll go, but I will leave you with a very important disclaimer below…
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