With Bitcoin collapsing by 5% in the past days, moving from $7,150 to $6,750 as of the time of writing this, traders have once again flipped decidedly bearish on cryptocurrencies.
Related Reading: Could Post Crypto Bubble Bitcoin Follow Dot Com Crash NASDAQ Chart?
They fear that this latest move under the key support of $7,000 will precede a strong capitulation event, one reminiscent of the collapse from $6,000 to $3,000 seen in late-2018.
What’s ironic, though, is that this latest drop has resulted in the Bitcoin chart printing a key bullish technical signal purportedly that was seen when BTC found a macro bottom in December 2018.
Bitcoin Indicator Prints Key Buy Signal
Thomas Thornton, a hedge fund services specialist and market analyst, recently posted the chart below to Twitter, showing that a Bloomberg chart of Bitcoin with the TD Sequential Combo indicator suggests that BTC’s current candle is on a “buy 13.”
Bitcoin with new DeMark Combo and Sequential buy Countdown 13’s. Needed to confirm is a price flip up (new 4 day closing high) pic.twitter.com/7SCPVxxFfU
— Thomas Thornton (@TommyThornton) December 17, 2019
13 candles, the TD Sequential suggests, are indicative of impending price reversals.
Not only is the 13 TD Sequential candle inherently indicative of a reversal, but such candles have also marked macro swing levels at least twice in Bitcoin’s history.
Per previous reports from NewsBTC, Tom Demark, the creator of the TD Sequential, took to Bloomberg earlier this year to talk about cryptocurrencies.
In his segment, Demark revealed that a 13 candle, which signifies a strong trend reversal, was registered by the TD Sequential when Bitcoin hit $20,000 in December 2017, and that another 13 candle, was seen when BTC cratered to $3,150 on December 14th. What’s more, a 13 candle was printed at the $14,000 top seen in June of this year.
The historical importance of 13 candles in terms of Bitcoin’s long-term price trends implies that BTC has finally bottomed and, as such, is ready to see a strong bullish reversal from here.
Not Only Positive Sign
This isn’t the only sign that suggests a reversion to a bull trend is likely. Per previous reports from this outlet, Adaptive Capital partner Willy Woo recently noted that on-chain momentum, which the popular analyst has long claimed is correlated with Bitcoin’s macro price trends, is “crossing into bullish” territory after a multi-month downturn.
With this in mind, he asserted that the “bottom is most likely in,” meaning that any move lower than the $6,500 plunge “will be just a wick in the macro view.”
On-chain momentum is crossing into bullish. Prep for halvening front running here on in. Can’t say what this indicator is, as it’s proprietary to @AdaptiveFund, but it tracks investor momentum. The bottom is mostly likely in, anything lower will be just a wick in the macro view. pic.twitter.com/WqiPRpweUv
— Willy Woo (@woonomic) December 7, 2019
Bear Factors Remain in Bitcoin Market
Despite these factors, there remain bearish wildcards in the cryptocurrency market, two wildcards in fact. These are the potential selling pressure from the PlusToken pyramid scheme and miner capitulation concerns.
Per previous reports from NewsBTC, the PlusToken cryptocurrency scam, which managed to procure billions worth of digital assets over its year or so in existence, has slowly been liquidating its proceeds on the open market, resulting in continual, excessive selling pressure.
There’s also fears that Bitcoin miners are selling their mined cryptocurrencies due to the fact that many miners are running unprofitable ventures.
Featured Image from Shutterstock