After trading sideways for several months, Bitcoin may be ready to not only break out of the trading range but also break out from its multi-year triangle pattern.
However, bulls must beware of the latest push beyond $10,000 triggering not one, but two sell setups on the same indicator on BTCUSD daily price charts.
Bitcoin Possibly Preparing Breakout From Bear Market Into New Uptrend
The hype surrounding Bitcoin’s halving took the asset to above $9,000 in late April just weeks after Black Thursday cut the crypto asset down to $3,800. Profit-taking from an over 100% rally combined with buying ahead of what most investors believe to be the next bull market, led to an equilibrium in price action.
The sideways trend lasted over 90 days, but as of this week, ahead of expected stimulus packages from the US, BTCUSD has potentially begun a breakout.
BTCUSD Daily Triangle Breakout | Source: TradingView
The leading cryptocurrency by market cap rose against the dollar starting early last week, surging over $1,000 to over $10,300 where it is currently trading.
Related Reading | How Will Bitcoin Respond To Its Biggest Listing Yet? The United States
The rally has broken above top trend line resistance stemming down from the asset’s all-time high, forming a massive, multi-year triangle. If BTCUSD can hold above the key trend line and close, it may be a sign that the new uptrend has officially begun.
But before bullish crypto investors break out the champagne glasses in celebration of the end of the bear market, not one, but two bearish signals have appeared on a very accurate indicator.
Combo-Breaker: Two Bearish Sell Signals Could Stop Cryptocurrency’s Advance
Reading through most cryptocurrency community threads, there’s a lot of back-patting and showboating by bulls. These crypto investors are already claiming victory over bears with Bitcoin trading back above $10,000 once again.
Although the cryptocurrency has been rejected at this level numerous times, the consensus is that this time is different.
Related Reading | What Happens Next? Bitcoin Range Falls To Tightest Point In History
Stimulus money is pumping gold and other assets, and altcoins are rallying around every corner. It shouldn’t be too surprising the most scarce asset in the world is growing against the dollar as the fiat currency floods the market.
But before bulls get ahead of themselves, this latest push above $10,000 has triggered two dangerous signals.
The TD Sequential indication has been used to call numerous tops and bottoms in Bitcoin on multiple timeframes. The asset triggered a sell at its all-time high, and again at the February 2020 top before Black Thursday.
BTCUSD Daily TD Sequential 9 & 13 Sell Setup | Source: TradingView [Via: Moe_Mentum Twitter]
It is now back once again, signaling not only a 9 setup but a 13 combo setup on the indicator. Both a 9 or 13-count on their own constitute a sell setup on the indicator, created by market timing expert Thomas Demark.
The indicator isn’t flawless, and the current uptrend and conditions could prove too much for bears to gain any sort of advantage. However, given the indicator’s accuracy in the past, it would be wise for bulls to watch for the daily close today to see how the signal unfolds.
by Tony Spilotro on July 27, 2020 at 10:30PM
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