Bitcoin has had its most profitable quarter on record dollar for dollar, rising more than $25,000 in Q1 alone. But despite the enormous bullish impulse, the price action has left behind the first ever bearish divergence on quarterly timeframes in the asset’s history.
Making matters worse, March is historically be worst month on record for the top cryptocurrency over the course of the last ten years. Could the bearish signal combined with this factor result in a much more sizable correction across crypto?
Bearish Divergences Stack Against Bitcoin On Quarterly Timeframes
2020 was the year of the pandemic, and the year of Bitcoin. During that time, Bitcoin price spent the first three quarters of the year ranging between $4,000 and $10,000, but once that range was finally broken towards the end of the year, there were fireworks come Q4.
Q4 is traditionally a time for enjoying the fruits of one’s labor with Thanksgiving and other holiday celebrations, and this year was especially fruitful for investors who weathered the long crypto winter.
Related Reading | Bitcoin Shakes Off Dollar Rebound But Beware Of Coming Bear Phase
With an unprecedentedly negative year in the rear view, the exuberance of the celebrations have carried well into Q1 2021, and taken Bitcoin to its best quarter ever in terms of total dollars gained.
Q4 resulting in a stunning $18,000 added to the price per BTC, while in Q1 2021 alone, there’s already been another $28,000 added to each coin’s price tag, with more than two thirds of the month of March left to go.
However, according to one crypto analyst, Bitcoin price would need to rise another $20,000 or so to bring indicators high enough to close the month out without falling victim to several bearish divergences on the quarterly candle.
Several popular trading indicators are signaling a bearish divergence | Source: BTCUSD on TradingView.com
Why Probabilities Point To A Correction, Not Continuation For Crypto
The sharp-eyed trader checking the not-often watched timeframe was able to spot a bearish divergence on the Relative Strength Index, RSI, On-Balance Volume, Chaikin Money Flow, Money Flow Index, Commodity Channel Index, and the Accumulation/Distribution technical indicators.
In this past, this many technical indicators stacking with bearish divergences on Bitcoin, resulted in one of the strongest uptrends in the cryptocurrency’s history.
The bearish divergence on the RSI is clear as day. | Source: BTCUSD on TradingView.com
The chart above shows how clear the bearish divergence is. To avoid these signals confirming with a bearish reversal in the short-term, Bitcoin price would need to continue tor climb by “$20,000 to $30,000” more before the end of March.
However, March is historically the worst month on record for Bitcoin, and that makes the probability of such a continued move unlikely.
But then again, this is Bitcoin and this bull market is the most powerful yet, so anything at all is possible, including another $20,000 to $30,000 move in less than 20 days.
China Banning Bitcoin Is a Big Mistake, Says Dan Held
- Bitcoin OG, Dan Held, tweeted, “China banning Bitcoin may be the biggest geopolitical mistake of the century.”
- His tweet sparked interesting conversations on the Twitter space, showing that people have varied opinions on the matter.
Dan Held, one of the OG supporters of the major digital asset, Bitcoin (BTC), initiated an interesting topic on Twitter yesterday. He says that China’s decision in banning BTC might be the ‘biggest geopolitical mistake of the century.’
China surprised the crypto space when it suddenly decided to ban BTC in the country. As this ensues, more crypto platforms are exiting the country and continuing their business elsewhere.
Of course, this decision created a massive butterfly effect in the market. There was some period this year that the market saw a drastic change from China’s move.
With that said, as Dan Held said, China’s decision may be a big mistake, indeed.
The Twitter crypto space, moreover, had different opinions on the matter. One account, @CurrencyWar1, said that “China’s CBDC will be the no. 1 digital currency in 2 years.” Another one, @theswampgirlUSA, said that “They [China] want the Chinese digital yuan to be a global reserve currency, not $BTC. Their #cbdc will incorporate #AI and social credit tracking so they can know everything about everyone.”
On the other hand, some are being speculative on the matter. For example, @Nuno_CFerreia said, “China is currently the number 2 holder of BTC… it doesn’t look like they banned it, they just want us to think they did.. the question is, why?”
Meanwhile, some took this as a positive thing. @jdubya said,
For China, yes. But it was the next positive step in the evolution of Bitcoin. It was not meant for one country to control so much of the mining resources. Better world distribution means a stronger network.
In any case, we will see if Dan Held’s opinion is true in the coming months or perhaps years. For now, the public is yet to see how China banning BTC will affect the country and the entire market.
At the time of writing, BTC’s price increased by 0.56% in the last 7 days and trade at around $61,000, according to CoinMarketCap.
Binance Moves 36,306 BTC Worth Staggering $2,214,339,246, Pays Just $3.47 in Transaction Fees
Global crypto exchange Binance just shuffled a 10-figure sum of Bitcoin between wallets as BTC clings to the $60,000 level.
Crypto data tracker BitInfoCharts spotted a massive transaction to the tune of 36,306 BTC – worth over $2.21 billion at the time of writing.
The transaction was first broadcast to the Bitcoin network on October 23rd at 4:41 AM GMT+8. The crypto was sent in a batch that includes a request to send 35,236 BTC ($2.15 billion) and 1,069 BTC ($65 million) along with two other transactions involving less than one BTC.
The Binance wallet that sent the 35,236 BTC was the 24th richest Bitcoin wallet in existence prior to the transaction.
All in all, Binance paid just 0.00005694 BTC in fees, worth $3.47.
Crypto exchanges occasionally move large batches of digital assets around for security purposes.
All of the sending and receiving wallets were identified by BitInfoCharts as the exchange’s cold wallets. Cold wallets are physical hardware wallets that can keep digital assets completely offline. They are generally considered more secure than hot wallets, which are software-based and connected to the internet.
Bitcoin BTC Price Analysis: Bearish Divergence on Weekly Time Frame Erased Earlier Gains Of The Week, Prepares the BTC For a Price Correction
Recent news headlines show that Wall Street welcomes the first bitcoin exchange trading fund (ETF) with Proshares Bitcoin Strategy (BITO) listed on the New York stock exchange.
The fund brought about 1 billion in trading volume in one day, influencing bitcoin price to an all-time high of $67,000, though bitcoin price later corrected by about 11% raising fears of sell-offs.
We believe you must have heard of the popular quote “buy the rumor, sell the news” correction right? There have been historic multi-month price slumps associated with major launches of bitcoin-related products. Lark Davis (@TheCryptoLark) October 8, 2021- thinks this will play out for the ETF as in the likes of the 2017 launch of CME that was followed by a prolonged bearish outlook.
Let’s analyze the BTCUSDT charts for insights into possible bearish and bullish scenarios.
Bitcoin BTC Weekly Chart Analysis
This week Tuesday and Wednesday, some traders got caught in the fear of missing out [FOMO], ignoring the regular bearish divergence pattern on the weekly time frame above. Although the Bitcoin BTC price set a new all-time high at $67000 on most crypto exchanges, it didn’t take long before the bears jumped in after some early bulls started to take some profits off the table.
We expect a dipper price correction if the BTCUSDT exchange rate plunge below the $39600.00 support level.
Bitcoin BTC Daily Chart Analysis
Viewing from the daily time frame, the BTCUSDT appears to be building up a hidden bullish divergence pattern if the BTC price fails to penetrate the $53700.00 support.
The daily chart maintains a steep uptrend as the BTCUSDT trades above level-25. On the other hand, RSI levels below level-25 should confirm a price bottom for the correction wave on the weekly time frame.
Bitcoin BTC 4HR Chart Analysis
Looking at the BTCUSDT from an intraday 4HR level, the largest cryptocurrency by market cap seems to be finding a price floor around the $59562.15 hidden bullish divergence support following a 10% price slump from its new ATH.
The on-chart RSI also signals a shorter range bullish divergence showing confidence towards a price increase at the intraday level.
However, a breakdown of the $59562.14 support would imply bearish sentiment at the intraday level. The intraday sentiment is bullish at press time.
Bitcoin BTC Intraday Levels
- Spot rate: 61250.16
- Mid–Term Trend [H4]: Strong Bullish
- Volatility: High
- Support: $59562.15 and $56818.05
- Resistance: $67000.00