Bitcoin’s daily chart reveals a bearish divergence, signaling an expected 8-10% price correction.
Analysts view the potential pullback as a healthy reset, easing overbought conditions.
Strategic traders could find buying opportunities during this temporary correction.
Recently, when it comes to Bitcoin and its daily time frame, more and more analysts and traders have highlighted a bearish divergence. It is hence inferred by them that Bitcoin’s current uptrend may potentially be threatened albeit temporarily through a correction reaching to 8 to 10%. This could be worrying to investors, but analysts believe it is a favorable development to enjoy further climbs of the cryptocurrency.
https://twitter.com/CryptoFaibik/status/1869257359601655989 Decoding the Bearish Divergence
A bearish divergence is created when Bitcoin prices make higher highs, but the RSI or some other momentum indicator makes a lower high. When this happens it signals declining pace and the asset may be overbought and may require correction as a result. In the daily Bitcoin chart, we have seen this pattern develop as the crypto asset challenges key resistance indicators.
However, when such a correction is expected, market analysts still insist that such pullbacks are considered natural in well functioning markets. New buyers always expect a reset in price for such assets, especially Bitcoin to dive into the market and buy, thus this reset could be a way of correcting the overbought conditions. This could not only extend the upward trend of the asset’s price over the long run but could also help build in more stability to the general level of this cryptocurrency.
Opportunity for Strategic Buyers
To the traders and investors in the market, the correction is a good entry point into the market. Previously, pull backs in an uptrend have been accompanied by strong bounces in the Bitcoin price. Finally, analysts recommend that monitoring of support levels during this period could be very significant for determination of entry points. But they also advise against over leveraging or using high risk, as the cryptocurrency market is still unstable and unpredictable.
However, all focus is on support levels and the overall market sentiment as Bitcoin nears this possible correction. Despite the bearish divergence which suggests a pull back, the medium to long-term trend on the Bitcoin price remains bullish.
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