At the turn of the month, analysts were quick to check Bitcoin’s charts, checking if any of their indicators signaled that bears remained in control of the cryptocurrency market. Unfortunately for bulls, indicators did.
Per previous reports from NewsBTC, November’s monthly candle close resulted in the Moving Average Convergence Divergence (MACD) — which is a “trend-following momentum indicator that shows the relationship between two moving averages of a security’s price” — crossing bearish for the first time since May of 2018, prior to Bitcoin’s extended bearish move from the $10,000s to the $3,000.
The monthly MACD on #bitcoin just had a bearish cross.
— Byzantine General (@ByzGeneral) December 1, 2019
Despite this, a prominent trader is not worried, claiming that the nature of the MACD suggests that a bottom is near, meaning that more downside, while not impossible, is limited at best.
Don’t Worry About the One-Month MACD Reading for Bitcoin
Dave the Wave — a prominent pseudonymous trader that called the Bitcoin decline to the $6,000s over four months ago, when BTC was trading in the $10,000s — recently published a TradingView post about the bearish MACD reading on Bitcoin’s monthly chart, asserting that investors shouldn’t be worried about the crossover that just took place.
— dave the wave (@davthewave) December 29, 2019
Aiming to calm the fears about the technical signal, Dave wrote that in the previous price cycle, “even as price bottomed, the monthly MACD continued to decline for a full 8 months.”
The analyst attributed this odd-on-the-surface trend to the fact that the MACD is a trend-following indicator, not a “leading indicator in predicting price [will] head down further.”
With this in mind, he remarked that the MACD is signaling the bottom is at least near, if not in already.
While Dave didn’t divulge his price projections in the aforementioned TradingView post, the prominent analyst is notably starting to flip bullish on Bitcoin.
Per previous reports from NewsBTC, Dave wrote that he expects for the one-week MACD to see a bullish crossover early next year:
“Weekly MACD shaping up to re-cross bullishly soon to confirm the continuation of the next cycle,” the popular trader wrote.
Bullish MACD readings on Bitcoin’s one-week chart marked the start of previous bull runs, including the miniaturized one seen from March of this year to July.
This comes shortly after he remarked that his price target’s for the cryptocurrency market’s de-facto “M1, M2, and M3” readings have recently hit his retracement targets: M1, Bitcoin’s market cap, has seen a 50% retracement; M2, the total market cap, a 61% retracement; and M3, the altcoin market cap, a 78% retracement.
Featured Image from Shutterstock