Bitcoin’s price action over the past few weeks has been deemed “boring” by most traders.
As the chart below shows, the leading cryptocurrency has been caught in a tight consolidation pattern.
Since the start of May, Bitcoin has barely deviated from $8,000-10,000. Only twice did the cryptocurrency move out of this range, though those moves saw quick rejections at crucial resistances.
Chart of BTC’s price action over the past ~two months from TradingView.com
Crucial market indicators, however, suggest that a bullish breakout is near.
This shift in sentiment comes after Bitcoin briefly touched $9,800 during Monday’s trading session, the highest price in over a week.
A CRUCIAL BITCOIN SIGNAL IS ABOUT TO APPEAR
As noted by cryptocurrency trader Joe McCann, a crucial Bitcoin signal is about to appear.
The AI/Cloud specialist at Microsoft noted on June 22nd that the Moving Average Convergence Divergence (MACD) is about to see a bullish crossover. The MACD “is designed to reveal changes in the strength, direction, momentum, and duration of a trend in a stock’s price,” according to Wikipedia.
The MACD is important as it has historically predicted Bitcoin’s medium-term trends.
Three days after BTC hit $10,500 in February of this year, the MACD saw a bearish crossover. What followed was the correction to $3,700.
And shortly after Bitcoin began its relief recovery after March’s crash, the indicator printed a bullish crossover. What followed was a more than 50% rally from the $5,000s to $9,000s.
Chart of BTC’s price action over the past four months with the MACD indicator from TradingView.com
The signal has not yet appeared but considering that BTC is pushing resistances, it could happen by the end of the week.
And considering the historical precedent of this sign, a strong rally may follow.
NOT THE ONLY THING SUPPORTING THE BULL CASE
The imminent bullish crossover is not the only market factor supporting Bitcoin bulls.
According to analyst Adam Li, the order books of two leading exchanges are flashing two bullish signals:
- A Binance sell wall around ~$9,450 was pulled by the seller, giving Bitcoin room to rally to the upside with minimal resistance.
- Users of OKEx have begun to build a block of buy orders around $9,500. This buy wall, which is amounting to hundreds of BTC, should support Bitcoin should it snap back to that level.
Order book data is crucial in understanding the trend of Bitcoin because it shows the aggregate sentiment of traders.
For instance, prior to Bitcoin topping at $10,500 at the start of June, a sell wall appeared on Bitfinex at that level. And prior to BTC rallying from the $6,000-7,000s to the $9,000s in April, a buy wall appeared on Bitfinex, bolstering prices.