The most recent Bitcoin price correction saw it shed gains from the last seven days. Although at the time of writing, BTC prices are surging, the Moving Average Convergence Divergence (MACD) is warning that the worst is yet to come.
On a one-day chart, MACD lines crossed to display a bearish signal. After the price corrections experienced a few hours to the time of writing, MACD is supposed to retrace to the top with the fast line crossing the slow to display a buy signal.
The above statement is not the case as the indicator is still heading down. If more buyers do not enter the market, prices may dip even further.
At the time of writing, BTC is trading below its pivot point. Trading below the pivot point is an indication of the bearish dominance rocking the market. If the MACD prediction comes true, traders can expect to see prices trade below $50k by the end of the month.
More to the woes, there is a trading gap in the CME’s Bitcoin derivatives product, dating back to last month’s rally. Prices lagged at $38k while Bitcoin went on to hit new highs. Historically, these gaps are almost usually filled, although ‘when’ it is filled is still a question that only time can answer.
Amidst the bearish signal displayed by MACD, a piece of positive news is that RSI is on the rise. This is an indication that prices may consolidate more and possibly hit $57k before the end of the month.
For the days ahead
The support level at $50,000 is paramount to any bullish run above it. Traders need to defend the $50k support or risk further price drop. Further price drops may signal the start of the bid to fill the $38k CME gap.
If traders can overturn the signals of the highlighted indicators, the $50k support can be used to support the drive to the top. At the time of writing, BTC is trading around $55,600 with a $1.04T market cap
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