The crypto strategist who accurately predicted last year’s Bitcoin meltdown thinks that BTC is in the process of printing a bear market bottom.
Pseudonymous analyst Dave the Wave tells his 129,400 Twitter followers that Bitcoin is forming a classic reversal pattern on the daily chart.
“Adam and Eve bottom for Bitcoin anyone? ‘This chart pattern is formed when one sharp V-shaped first bottom low is made on high volume. This is the first Adam bottom. Then the price bounces back higher but later goes lower a second time to create a second cup shape as a second bottom that is the Eve on decreasing volatility and a tighter price range.”
The pattern is traditionally a bullish formation as it suggests that market participants are in the process of accumulating the asset while establishing and defending a price bottom. Based on Dave the Wave’s chart, it appears that the bottom for BTC is around the $18,000 level, with the confirmation of the pattern at around $25,000.
Looking at the weekly chart, Dave the Wave highlights that the logarithmic moving average convergence divergence (LMACD) indicator just flashed a bullish signal. The crypto analyst shares a chart showing how the weekly LMACD crossed and bounced at a level that marked the end of the 2018/2019 Bitcoin bear market.
The indicator is designed to reveal changes in an asset’s trend, strength and momentum.
Says Dave the Wave,
“The longer-term momentum indicator serves to correct reactive sentiment on the volatility of the day… and even the weekly unclosed candle.”
At time of writing, Bitcoin is changing hands for $20.720, down over 1.18% on the day.Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
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Featured Image: Shutterstock/betibup33/David Sandron