The bitcoin weekly chart above looks like a Jackson Pollock. Bitcoin has shelled-out a lot of drama over the last few years. Keystone called the Fall 2021 top. Remember that? Everyone was off the charts bullish expecting nothing but big numbers ahead. Folks talked about bitcoin 100K, 200K, 600K. It got out of hand. You never want to be contrarian for the sake of being a contrarian but all it took was a look at the neggie d on the weekly chart (red lines) to know that bitcoin was cooked. It was an easy top call. Nothing to it. Child's play.
So bitcoin receives the neggie d spankdown in late 2021 and pukes its guts out in 2022. All the guys bragging to everyone at Thanksgiving dinner 2021 that they hold bitcoin and are an expert in trading cryptocurrencies had their heads handed to them during Thanksgiving 2022 dinner. Uncle Johnny asked Timmy Trader about the bitcoin he owned and was bragging about last year but Timmy kept his head down eating mashed potatoes pretending he did not hear the question.
But, conversely, bottoms tend to occur when everyone is negative and wants nothing to do with the stock, ETF, bitcoin or whatever you are trading.
The green lines show bitcoin price continuing lower in Oct-Nov 2022 but ALL the indicators are positively diverged (sloping higher) signaling that the indicators are fueled-up with bull juice and ready to launch. Voila, price rallies higher at the end of last year into this year and now everyone is proclaiming a new beginning for bitcoin heading higher. Not so fast.
Price pops above the upper trend line of the blue sideways symmetrical triangle a bullish indication. However, the red lines show that the indicators are all sloping down. A red down arrow is not drawn on the chart for the current price action because price did not quite make it back up to the prior high in April, on the weekly basis, at 30600. You cannot have negative divergence if price did not yet make a higher high. Bitcoin is at 30140 in the neighborhood.
Thus, watch the price in the days ahead. If bitcoin runs higher above 30.6K, check the chart indicators above. If they remain negatively diverged, the top is in for bitcoin on the weekly basis. Bitcoin bulls need the indicators to regain strength to send price higher but they are spent on the weekly basis.
The Aroon shows the majority of bitcoin bulls expect it to continue higher forever while humorously, the majority of bitcoin bears also expect the digital currency to rally higher. This is a contrarian indicator showing that the boat is loaded to one side with bitcoin bulls.
The ADX shows that the first push higher in 2019 was a strong trend, but that petered out, then the big move up in 2020 and 2021 evolved into a strong trend higher but that petered out in 2021. The low ADX verifies that bitcoin price is staggering sideways and directionless like a drunk in Times Square on Saturday night.
If you see bitcoin above 30.6K this week and the indicators remain neggie d, you can call the top in bitcoin on the weekly basis (a multi-week down move begins). Keystone does not hold any bitcoin. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
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