Why This Bitcoin Indicator Points To Bullish Double Bottom
Bitcoin continues to push to the upside, closing multiple daily candles in the green, positively impacting the crypto market. At the same time, the cryptocurrency benchmark is trending higher, and overall sentiment is shifting into greed territory for the first time since May 2022.
At the time of writing, Bitcoin (BTC) is trading at $20,850 with a 1% gain in the last 24 hours and a 9% gain in the last week respectively. Ethereum (ETH) and Dogecoin (DOGE) are the best in the top 10 by market cap on similar timeframes.
Bitcoin Rally Likely to Continue?
Bitcoin and the crypto market showed a high correlation with traditional economics. However, digital assets have moved against the trend in recent days.
While Amazon, Netflix, Apple, Meta and other major tech companies fell due to low earnings, Bitcoin broke above critical resistance at $20,500. As such, BTC and the crypto market closed in the green as the weekend approaches.
With traditional markets closed, cryptocurrencies are free to make more profits. The bullish momentum extended to traders’ disbelief and due to Dogecoin and Ethereum’s push to the upside.
The king of meme coins rallied this Friday after Elon Musk confirmed the purchase of social media platform Twitter. The bullish price action in the crypto market led many traders to open short positions, leading to a higher uptrend.
When highly leveraged positions are liquidated, the market may continue the trend. This status quo is likely to persist over the weekend, but could face headwinds during the week. According to cryptanalyst Justin Bennett:
The strong close to the week from stocks is likely reason enough for #crypto to pump this weekend. Throw in the massive $BTC short liquidations over $21k and you have another reason. I’m less optimistic about Monday, though, given where stocks closed on Friday (…). The shorts are still piling in and there is still plenty of liquidation above these highs. This pump is most likely not finished yet.
If traditional markets recover from last Friday’s levels, Bitcoin and company will follow suit. A pseudonymous trader pointed to the On-Balance-Volume (OBV) indicator, a metric used to measure market momentum. The metric formed a double bottom and resumed its uptrend, suggesting further appreciation.
#Bitcoin – OBV is going strong after finding a double bottom. The true bottom indicator. pic.twitter.com/s6JgTqjIeT
— IncomeSharks (@IncomeSharks) 29 October 2022
