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Bitcoin is preparing for a huge price movement

During the last few days, Bitcoin bulls have been defending $ 4,000, which is increasingly becoming a support level for the cryptocurrency. Despite this, it has not yet accumulated enough buying pressure to push its price beyond the low range of $ 4,000.

Now, a widely used technical indicator is pointing out that Bitcoin could be reaching a tipping point that will lead to a massive price movement.

Bitcoin on the edge of a big movement

A recent Bloomberg report details that Bitcoin is close to making a large price movement based on the widely used GTI VERA band indicator, which uses trend data in any time frame to provide investors with information on the direction it should take. an active. This indicator also states that Bitcoin is currently in its longest buying trend since September.

This indicator is now seeing a drastic narrowing of its upper and lower bands, which generally precedes a large price swing. This, along with the recent buying trend in which Bitcoin has been, may indicate that you will see a significant increase in purchase volume in the near future.

Another widely used indicator called the Directional Movement Index (DMI), also recently issued a buy signal for Bitcoin, which is based on the strength and momentum of buying and selling trends.

The DMI separates price movements into a category of positive or negative directional movement, which is used by operators to quantify the strength of a particular trend. Earlier this week, the DMI tested positive for Bitcoin for the first time in several months, indicating that the “very strong” selling pressure of Bitcoin had largely subsided, and that the volume of purchases is gradually increasing.

What do analysts think about the Bitcoin price action?

Only time will tell if these indicators are correct or not by assuming that the price of Bitcoin will increase soon, and analysts have mixed opinions regarding this data.

While talking to Bloomberg about DMI’s positive change, Mati Greenspan, senior market analyst at eToro, said that to make a truly optimistic case for Bitcoin, it must decisively increase above $ 5,000.

“In technical analysis, this makes these levels very strong. But I think that only once we see a strong break above 5,000, 6,000, if we exceed 7,500, is when people start to become really optimistic, “Greenspan said.

Travis Sling, the founder of Ikigai, a cryptocurrency hedge fund, is cautious about bullish price indicators for cryptocurrency markets and says he believes markets will continue to have lower lows in the future before moving forward much more.

“It is unlikely that the fund is in Bitcoin, I am certainly willing to change my mind, but the preponderance of the evidence leads us to believe that we will see more minimums before reaching higher.”

While operators wait patiently to see how Bitcoin responds to transactions above $ 4,000, the validity of these historically accurate indicators will remain in question.

Also published on Medium.

Published inCryptocurrencies

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