#bitcoin price action is at an impasse. #Bulls and #bears are divided as to what happens next, leading to months of consolidation. It could all come down to the next few days, according to the most important #BTCUSDT price chart you’ll see this week.
The chart shows just how critical the stalemate in crypto markets is currently, and why this week could be the end of the indecision.
Bitcoin Momentum Takes A Pause, But What’s Next?
In technical analysis, the velocity of price increases or decreases can be measured by momentum. Various tools exist that get the job done, including the Moving Average Convergence Divergence indicator. The tool is designed to give overbought and oversold signals, plus buy and sell signals based on crossovers of the signal and MACD lines. Passing through the zero line is also an indication of momentum strengthening, as well as the underlying trend.
It is for all these reasons and more that the chart below is so important. The chart consists of BTCUSD on the one-week timeframe. Underneath the price action is the LMACD – a logarithmic version of the MACD. The log version allows more comparative analysis between long-term cycles. At just a glance, it is easy to see that the tool appears ready to cross downward, generating a sell signal.
Below The Zero Line: Doom Or Redemption?
What’s worse is the fact the sell signal will occur alongside a failure to hold above the zero line on the LMACD. Such a sign of momentum failure would more than likely lead to a retest of current bear market lows across crypto. However, the D in the indicator’s name stands for “divergence.” Signals are generated based on the tool converging or diverging. Diverging upward in Bitcoin, could send the crypto market blasting off higher instead.
But beware. It is possible that both situations could happen before the week’s end. The LMACD could cross down and turn the histogram red for the first time in 2023 and shake out those eager to jump the gun on the sell signal. After the shakeout, the tool could diverge up before close and continue to push momentum and price to new highs. Alternatively, the tool could diverge upward at this inflection point, only to later cross back down. What is for certain is that the current lack of a decision in price direction is about to end, according to the LMACD.
source: newsbtc by Tony "The Bull"
image source: ai
Disclaimer
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
