3 Key Metrics Suggest Bitcoin Price Has Completed Its Macro Bear Cycle


Whilst the Bitcoin price (BTC) action may seem bearish to some, the leading digital asset has several bullish indicators that hint towards an imminent recovery.

As Bitcoin enters the last month of 2019, will the king of cryptocurrencies finish on a bullish rally, or fall to a yearly low?

Daily crypto market performance. Source: Coin360.com

The daily chart turns bullish

BTC USD daily chart. Source: TradingViewBTC USD daily chart. Source: TradingView

Since the beginning of November, the daily chart has been bearish. Multiple attempts were made to break $9,500, but this failed to materialize and what came next was three and a half weeks of pain as Bitcoin plummeted to around $6,500 on Nov. 25.

The good news is that Bitcoin seemed to bounce off its new floor and quickly gained over $1,300 from it’s low, changing the trend on the daily chart from bearish to bullish.

Using the Bollinger Bands (BB) Indicator, it seems the next milestone to break will be the moving average which currently lies at $8,000. From here Bitcoin will have a shot at the low $9,000 range.

Before reaching this conclusion, let’s see if there are any other indicators that share the bullish bias?

The MACD also looks bullish on the daily timeframe

BTC USD MACD daily chart. Source: TradingViewBTC USD MACD daily chart. Source: TradingView

The Moving Average Divergence Convergence (MACD) indicator shows that Bitcoin seems to be on target for a bullish cross when the daily candle closes.

This will result in the first green candle to be printed on the MACD histogram, and history shows that this results in a reversal period, how long that period will last is difficult to answer, but it’s a buying signal to traders nonetheless.

Fortunately, there is even more good news.

CME gap closed high

BITCOIN CME futures daily chart. Source: TradingView

BITCOIN CME futures daily chart. Source: TradingView

The Bitcoin CME gap has become quite the tradable event lately, however, in recent weeks, the gap has been below the weekly open but this is not the case this forthcoming week.

On Nov.29 the CME market closed at $7,800 and at the time of writing, Bitcoin is currently trading at $7,300. This means that should the CME gap-fill next week, Bitcoin will experience a 7% price increase.

Whilst this is not a guaranteed outcome, it has become a very reliable metric unique to the digital asset of late, and such a boost in addition to the other bullish indicators, would be welcomed by the bulls.

The weekly RSI remains oversold

BTC USD RSI daily chart. Source: TradingViewBTC USD RSI daily chart. Source: TradingView

The last bullish indicator on the daily chart that I want to look at is the Relative Strength Index Indicator (RSI). Over the last week of November, the RSI was showing that BTC/USD was heavily oversold. The lowest point read 17.65 on Nov. 25 and even though the RSI is currently pointing downwards, it’s showing a reading in the mid-30s. As the RSI approaches 30, it sends a buying signal that an asset is oversold to traders.

It isn’t often that traders get so many tangible bullish signs lining up like this so could this be the beginning of the next Bitcoin parabola? Or is there something we’re not seeing?

The weekly chart

BTC USD weekly chart. Source: TradingViewBTC USD weekly chart. Source: TradingView

The weekly Bitcoin chart shows that the support on the Bolinger Bands indicator has been broken twice in as many weeks. Bears could take this as a sign that the price is about to fall through the floor or bulls could interpret it as the price holding its ground before a reversal.

The weekly MACD is still bearish

BTC USD MACD weekly chart. Source: TradingViewBTC USD MACD weekly chart. Source: TradingView

There’s no denying that the MACD looks bearish on the weekly chart. Both the Signal and the MACD line are pointing down. This would normally indicate that things are not looking too rosy for Bitcoin, however, traders must also consider that the MACD is not showing any of the positives from the past week that is evident on the lower time frames.

As such, when the weekly candle closes, the MACD should paint a very different picture, a picture that shows the bleeding is coming to an end. This coupled with the week ahead means that traders could see a 7% increase if the CME gap is filled and the MACD could even cross bullish by Dec. 9.

The weekly RSI also looks oversold

BTC USD RSI weekly chart. Source: TradingView

BTC USD RSI weekly chart. Source: TradingView

Lastly, traders must also analyze the RSI on the weekly timeframe. Whilst it may not look confidence-inspiring at first glance, there are positives that can be observed in this timeframe.

Currently, the RSI is leaning towards being oversold with a reading near 38.05. Typically, readings around 30 are considered a buying signal to traders and I view the weekly RSI as a positive indicator.

If the RSI had been reading 50-70 then traders might have decided against buying Bitcoin this coming week as this would have been a signal to hold off for a little longer. However, the lines analyzed today all suggest that the bleeding has come to a temporary slowdown and that the week ahead isn’t terribly bleak.

BTC USD monthly chart. Source: TradingViewBTC USD monthly chart. Source: TradingView

Bearish scenario

Despite the bullish outlook provided by this analysis, Bitcoin’s price is still sitting slightly above the moving average of the Bollinger Bands on the monthly chart. However, this will be the 4th consecutive month that it has tested this level. Should the price fail to hold above $6,900, this could open up a new path down to $2,750.

Bullish scenario

With a pending bullish MACD cross and the possible CME gap-fill to $7,800 this week, traders could look for Bitcoin to hold $7,800 as a new level of support. This could open up $9,050 as the next key level of resistance over the coming week.

The views and opinions expressed here are solely those of the @officiallykeith and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.