3 - 5 minute read
Bitcoin, the world’s most famous cryptocurrency, has been on a bullish run for several weeks, smashing through resistance after resistance. On Sunday, April 11th, it finally broke through the $30,000 resistance level, hitting ten-month highs of $30,438 on Bitstamp. However, doubts are beginning to emerge among traders over the strength of this rally, and some are warning of a “bearish divergence” that could lead to a price correction. This article will provide insights into the current situation in the cryptocurrency market and what traders can expect from Bitcoin’s future price movements.
According to data from Cointelegraph Markets Pro and TradingView, BTC/USD’s hourly candle chart suggests that bitcoin held $30,000 as support before the April 11 Wall Street open. While the final surge to $30,000 delighted traders, some believe that there could be turbulence on the horizon.
BTC vs. Altcoins
Kaleo, a cryptocurrency trader, tweeted, “Bitcoin is breaking out, of course, all of the USD charts are going to look decently bullish. Look at the alt charts vs. BTC. I don’t see any that I like atm. Thus – while you might still be up in USD w/ some alt positions, your capital is still best allocated stacking more Bitcoin.”
In contrast, Daan Crypto Trades thinks that bitcoin may consolidate and that ALT/BTC pairs should gain some ground, suggesting that bitcoin market dominance may continue to increase if spot price gains remain brisk. “It will be interesting to see what happens around here,” he wrote in part of a reaction tweet.
#Bitcoin / $BTC
— K A L E O (@CryptoKaleo) April 10, 2023
What I'm currently watching pic.twitter.com/Kgl36dHUD0
Bearish Divergence?
Venturefounder, a contributor to on-chain analytics firm CryptoQuant, warned of a “bearish divergence” between spot price and relative strength index (RSI) on the daily chart. “Looking for a short term correction down to at least $25k sometimes soon, potentially down to $22k,” they predicted.
Similarly, trader Cheds eyed what he called a “triple bearish divergence” with on-balance volume (OBV), considering a short position but being “not in one” overnight. In contrast, popular trader Crypto Ed dismissed the idea on slightly longer 3-day timeframes.
The Bottom Line
Bitcoin’s recent bullish run has left many traders excited, but there is a growing concern that a price correction is in the offing due to bearish divergences. To prepare, traders should remain vigilant and adaptable, keeping an eye out for potential market risks and opportunities. As always, it is also worth highlighting that cryptocurrency markets are highly volatile, and it is essential not to let emotions cloud one’s judgment.
