The world’s leading digital asset, bitcoin, has depreciated 77% this year, reaching its lowest price (US$15,479) on November 21 – narrowly missing the November 9 low. However, BTC did not have the strength to continue the downward movement.
In this scenario, analyzing the indicator that measures the Relative Strength Index, a divergence from bearish to bullish was observed, causing prices to have a bullish movement and a possible trend reversal in the short term following the daily chart.
It would be interesting and healthy for the asset if it seeks – and sustains itself – above the next resistances, in the region of US$18.5 thousand and then at US$21.5 thousand, marked in the chart below, so that we can see a new bullish trend.
“The divergence from bearish to bullish happens when prices perform descending tops and bottoms, but the indicator shows ascending tops and bottoms, contrary to the asset’s movement, characterizing a weakness in the bearish movement and possible trend reversal,” explains Transfero’s research team.
Chart by Trading View
With the weekly chart’s medium/long term perspective, the asset also performs a bearish to bullish divergence configuration by the RSI index. However, there still needs to be confirmation of the price for us to believe in a trend reversal. This will only be possible if the asset stays above US$ 25,000 or if it first performs a reversal figure.
Since bitcoin has just reached the same duration as the last two Bear Markets after the halvings marking historical bottoms, and on both the weekly and daily timeframes is performing bearish divergence, these factors lead us to believe in stabilization and even recovery of the asset at the moment.
Chart by Trading View
It is worth explaining that halving is a phenomenon intrinsic to the nature of bitcoin, which generates a supply shock in the asset, leading the number of bitcoins to fall by half, which causes prices to rise by the law of supply and demand.
To better understand it, continue reading here. The bear market is a financial market term that refers to a sharp decline in asset prices. Learn more.
