Breakdown Over? Bitcoin Indicators Suggest Price Outlook Is Improving

에 게시 됨 by Coindesk | 에 게시 됨

Bitcoin looks to have fought off a recent bear market breakdown that saw prices landing just above the yearly low of $5,755.

Bitcoin dropped to $5,858 yesterday at 02:00 UTC, just $103 shy of this year's bottom, according to Bitfinex data.

The suffering has been even worse for much of the altcoin market, some of which have been bleeding out to new yearly lows and seeing drops between 2-15 percent.

At time of writing, bitcoin is up 5.16 percent over a 24-hour period, according to CoinMarketCap, and is changing hands at $6,375.

Glaring out on the daily chart, the relative strength index, used to judge the momentum of a trend, has formed a bullish divergence, whereby prices moved lower, but the RSI moved higher creating a 'divergence' from the current bearish setup.

A monthly low slightly higher than the yearly low of $5,755 reveals the bears are becoming exhausted in their attempt to drive down prices with declining volume apparent since the middle of May. It is also worth noting that the monthly RSI is at its lowest since October 1, 2015 - a level that may have potential to trigger a buying frenzy, reversing the bearish trend seen since Jan 1.

A drop below recent monthly lows would expose bitcoin to the yearly low of $5,755 as it fails to cement a higher high.

A bullish divergence can be seen on the daily RSI - a sign of a potential reversal in the current bear market.

Declining bear volume on the monthly chart since the middle of May - keep an eye on the monthly close to see if bears fail to match or top the previous month, signaling exhaustion.

A drop below recent monthly lows would invalidate the bullish perspective.

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