Bitcoin Bullish Hammer Reversal Forming, But Beware Of Bull Trap Potential

2020-12-9 17:22

Bitcoin price dipped as low as $17,700 overnight before bulls drew a line in the sand and began to defend the recent rally. Although the move down was sharp and severe, the strength of bulls has left a long wick behind and a bullish “hammer” is forming. A daily close at or above $18,500 could signal another push higher, but it also could be bait for a massive bull trap.

Bitcoin Bulls Drop The Hammer On Bears Following Overnight Selloff

Bitcoin bulls are unstoppable these days. They are now led by the likes of corporate execs such as Michael Saylor of MicroStrategy and Jack Dorsey of Twitter and Square Inc, and hedge fund managers Paul Tudor Jones, and Stanley Druckenmiller. Billionaires are getting into the cryptocurrency in search of a place to store value, and it is causing the price to rise dramatically.

At the same time, the limited BTC supply is being gobbled up by these folks, and by institutional investors buying shares of Grayscale Bitcoin Trust. Grayscale themselves are absorbing more BTC per day than miners are producing since the halving.

Related Reading | Why New Bitcoin Investors Shouldn’t Be Deterred By The Scarce BTC Supply

With so little supply versus demand, the bull market is back. But even bull markets correct, and after such a sizable rally, the leading cryptocurrency by market cap saw its first downside and shift in momentum recently.

Weeks ago, a selloff to low $16,000 was defended by bulls, and overnight last night, a higher low might have been put in with a strong defense of $17,700. The rebound has led to a daily candle forming that appears to resemble a bullish reversal signal called a “hammer.”

Bitcoin bulls are forming a hammer candle – a potential reversal signal | Source: BTCUSD on TradingView.com Stop! Hammer Time:  Why The Reversal Signal Could Be Bait For A Trap

A “hammer” is a bullish reversal signal and is given its name because the long wick below resembles a handle with the candle itself acting as the head. A close with such a structure could be a sign Bitcoin is ready to move higher after a successful display of strength by bulls.

However, further examination and technical analysis outlines the probability of a bull trap like scenario. The bullish hammer could be “bearish retest” of a lost trendline in disguise.

The uptrend line was lost, along with the middle-BB, warning of a bearish retest situation | Source: BTCUSD on TradingView.com

Bitcoin has also lost the mid-BB on the Bollinger Bands for the first time since the rally started. Closing below the middle-BB can be used as a signal to buy or sell effectively in most markets.

Related Reading | Bitcoin “Double Top” Narrative Builds, Factors To Potentially Fear

Crypto analysts have been confused about where Bitcoin goes next, and unfortunately, this latest price action does little to clear things up.

Featured image from Deposit Photos, Charts from TradingView.com

Similar to Notcoin - Blum - Airdrops In 2024

origin »

BullshitCoin (BULLS) на Currencies.ru

$ 0 (+0.00%)
Объем 24H $0
Изменеия 24h: 0.00 %, 7d: 0.00 %
Cегодня L: $0 - H: $0
Капитализация $0 Rank 99999
Доступно / Всего 0 BULLS

bulls forming bullish hammer bitcoin long wick

bulls forming → Результатов: 91


Фото:

Analyst: Bitcoin is Forming a Grave Bearish Divergence on Its Macro Chart

Bitcoin has been struggling to hold above $19,000 following its latest rejection around its all-time highs The selling pressure at this level has proven to be quite intense, and it remains unclear as to when bulls will be able to surmount it For this region to be broken, Bitcoin’s buyers will first have to show some greater signs of strength, as they are currently struggling to hold the crypto above $19,000 A continued bout of […]

2020-12-3 02:00


Фото:

Indicator Shows Bitcoin is “Overbought” as Average Investor Profit Hits 115%

Bitcoin may be forming a mid-term top around its recent highs, with the multiple rejections posted at $13,800 not bearing too well for its short-term outlook The cryptocurrency remains caught within a potent uptrend, but this level is proving to be incredibly difficult for bulls to break If they continue failing to find any stability around this level despite the bullish monthly candle close, it could point to weakness amongst buyers One analytics firm is […]

2020-11-3 02:00


Ethereum Could Plunge to $315 if Bulls Fail to Defend One Key Level

Although the altcoin market has not been tracking Bitcoin’s upside as of late, it is still fully exposed to its downside The cryptocurrency faced another rejection at $13,800 overnight that caused it to reel into the lower-$13,000 region This created headwinds that put a firm end to the breakout rally that Ethereum started forming yesterday ETH has now erased all of its recent gains and is now at risk of seeing significantly further downside One […]

2020-11-3 23:00


Фото:

Analyst: Altcoin Downside Extremely Limited as Bitcoin Remains Stable

Bitcoin has been stable in the time following its $13,800 rejection, with bulls gaining some momentum as the cryptocurrency flashes continued signs of strength Although it is not showing any overt signs of weakness at the moment, altcoins have been capitulating throughout the past few days and weeks, with many posting immense losses Analysts are now noting that altcoins may be in the process of forming mid-term bottoms One trader is noting that downside on […]

2020-10-31 21:00


Фото:

Ethereum Bears Have the Upper Hand as ETH Trades Within Crucial Range

Ethereum has been forming an incredibly close correlation to Bitcoin throughout the past couple of weeks It is attempting to break this correlation now, but bulls are flashing some signs of weakness, especially while looking towards its BTC trading pair Analysts are now noting that ETH is trading within a crucial range that could determine its future The upper boundary of this range sits just a hair above where it is currently trading at, but […]

2020-7-21 23:00


Фото:

Ethereum Forms Grim “Triple Top” Formation as 92% of Traders Go Long

Ethereum has pushed higher despite Bitcoin’s stability, leading bulls to retest its key near-term resistance The cryptocurrency is on the cusp of forming a highly bearish technical formation that could be confirmed if it posts another harsh rejection at its current price level This comes as 92% of traders on Bitfinex go long on ETH, signaling that a long squeeze may be imminent Although Bitcoin has continued extending its bout of rangebound trading within the […]

2020-4-29 23:00


Фото:

Bitcoin Price Analysis: Bulls Pushing BTC Towards $11,000

In my previous analysis, we looked at how bitcoin price action was trading in a key decision point. Now BTC bulls are heading back towards the $11,000 price mark forming a new uptrend. Bitcoin Price 1-Hour Chart On the 1 Hour chart for XBT/USD, we can see how the recent breakout of the asymmetrical triangle mentioned in a previous analysis has progressed over the last 3 days.

2019-8-3 19:16


GXChain Price Analysis GXC / BTC: Baiting The Bulls

GXChain has a bullish short-term bias against Bitcoin, with the GXC / BTC pair breaking above key resistance The four-hour time frame is showing that a bullish inverted head and shoulders pattern is forming A bearish head and shoulders pattern continues to take shape on the daily time frame Fundamental Analysis GXChain has gained bullish […] The post GXChain Price Analysis GXC / BTC: Baiting The Bulls appeared first on Crypto Briefing.

2019-8-1 16:10