Bitcoin’s technical indicators are looking bad as of late. A turning of the monthly MACD could signal that we are in for a correction that may last until the end of 2019.
The moving average convergence/divergence (MACD) is a trend-following indicator that is commonly used to track Bitcoin’s price movements over time. Overall, it’s a useful way to gauge whether momentum is still bullish or bearish. Whenever this indicator flips, it’s generally a sign of a reversal of some kind.
Is Bitcoin in for a Reversal?
Bitcoin’s monthly MACD may just be making that flip, and it’s turning could spell bad news for the rest of the year. According to crypto-trader Dave the Wave (@davthewave), the monthly MACD is on shaky footing as of now.
Still watching this closely. A turning of the monthly MACD would signify the real possibility of an extended correction through to year's end…. pic.twitter.com/vE5gpzVsUv
— dave the wave (@davthewave) August 22, 2019
Bear in mind, Bitcoin is currently being squeezed by events outside of just technical analysis. For one, the leading cryptocurrency was following gold for much of last month thus appearing to act as a kind of ‘hedge’ against global instability. Many believed the currency crisis and trade war between China and the U.S. would boost Bitcoin further, but it seems that the buyers have dried up. Although gold remains strong, Bitcoin has tumbled. It seems that the ‘Bitcoin as a hedge’ theory is, for now, wholly speculative and cannot be relied on as fundamental analysis.
The ‘Deathstreak’ may Have Been the Start
What this all leaves us with is a troubling situation. This month, Bitcoin broke a record for posting 14 4H red candles in a row. The so-called ‘deathstreak’ was noted by analysts and traders as being a possible omen of more market turbulence to come. It seems that, for now, some of these doomsday prophecies are coming true.
Now, you may be reading this and saying, “Bitcoin is still almost worth $10,000! So what?” If you bought earlier this year, this is certainly true. However, we are looking at a possible bearish momentum moving forward if the monthly MACD flips. It would invalidate everyone’s expectation that we in the beginnings of a bull market—that alone should make anyone skittish, regardless of what your initial position is.
Do you believe that Bitcoin will undergo a correction until year’s end? Let us know your thoughts in the comments below.
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