Bitcoin has seen extreme lows and questioned its temporary bottom; however, based on the price movements of the past week, new technical indicators indicate that these movements may be in the process of reversing. As per market analyst Ali Martinez, regarding the 12-hour range, there are multiple TD buy signals giving some optimism for those looking for recovery in Bitcoin price.
The TD Sequential Signal – A Catalyst for Reversal
The Tom DeMark (TD) Sequential indicator is a widely used tool in technical analysis to find trend exhaustion and possible price inflection points. In today’s marketplace, Bitcoin has printed both a “TD 9” and a “TD 13” on the 12-hour timeframe which is an uncommon event and has commonly occurred before there have been major trend reversals.
When bearish momentum reaches a level of “9”, this indicates that the current momentum has been pushed too far. “13” represents the end of a “countdown”. When these two numbers agree, the pressure of selling is at its peak; therefore, there is likely to be a rebound. In the last chart provided, BTC is currently trading at between $76,000 and $78,000 and with the current indicators, it is likely that BTC will be back above $80,000 plus shortly.
Market Sentiment and Institutional Resilience
Although declining from peaks around $89,000 recently has caused some fluctuations, overall sentiment about cryptocurrencies is still generally optimistic. The majority of this optimism comes from ongoing/traditional institutional users having a significant investment. There is still a large amount of activity around spot-based Bitcoin exchange-traded funds and, while there are times when there are infrequent short-term outflows that create some temporary volatility, this overall long-term accumulation trend remains unaffected.
The current expansion of the broader Web3 ecosystem includes expanding into new niches; therefore, these technical setups have helped legitimize the overall Web3 Industry further. Moreover, these Integration of such utilities & adoption helps to provide a long-term macro bullish case for Bitcoin as the demand continues to increase.
Key Levels to Watch
Bitcoin support, at more than $75000 is required for TD to validate its buy signal. A strong close above the 20-day Moving Average would also provide confirmation of a reversal and could trigger a large amount of FOMO (Fear Of Missing Out) amongst retail traders. If prices drop below these levels, the market may begin to look to the $73000 support area for a larger period of consolidation.
According to analysts at CoinDesk, the macroeconomic environment, notably any upcoming inflation figures and statements from the Federal Reserve, are expected to heavily influence whether this technical rebound can retrace back to the previous all-time highs.
Conclusion
TD 9 and TD 13 signal convergence are strong technical reasons for a potential Bitcoin recovery. While technical indicators are not guarantees, as mentioned above, the sheer amount of bearish momentum exhaustion on such a large time frame, such as the 12-hour chart, is something that disciplined traders cannot overlook. Now that the market has started to digest all the recent volatility, the question is will the bulls take advantage of the exhaustion and regain some of the lost ground?
