Why This Is The Most Important Bitcoin Chart You’ll See This Week

Bitcoin price action is at an impasse. Bulls and bears are divided as to what happens next, leading to months of consolidation. It could all come down to the next few days, according to the most important BTCUSD price chart you’ll see this week. The chart shows just how critical the stalemate in crypto markets is currently, and why this week could be the end of the indecision. Bitcoin Momentum Takes A Pause, But What’s Next? In technical analysis, the velocity of price increases or decreases can be measured by momentum. Various tools exist that get the job done, including the Moving Average Convergence Divergence indicator. The tool is designed to give overbought and oversold signals, plus buy and sell signals based on crossovers of the signal and MACD lines. Passing through the zero line is also an indication of momentum strengthening, as well as the underlying trend. Related Reading: Bitcoin Price Double Fractal Points To “Extended” Parabolic Rally It is for all these reasons and more that the chart below is so important. The chart consists of BTCUSD on the one-week timeframe. Underneath the price action is the LMACD – a logarithmic version of the MACD. The log version allows more comparative analysis between long-term cycles. At just a glance, it is easy to see that the tool appears ready to cross downward, generating a sell signal. The inflection point is visible in the LMACD | BTCUSD on TradingView.com Below The Zero Line: Doom Or Redemption? What’s worse is the fact the sell signal will occur alongside a failure to hold above the zero line on the LMACD. Such a sign of momentum failure would more than likely lead to a retest of current bear market lows across crypto. However, the D in the indicator’s name stands for “divergence.” Signals are generated based on the tool converging or diverging. Diverging upward in Bitcoin, could send the crypto market blasting off higher instead. Related Reading: Down But Not Out: The One Line Bitcoin Must Hold To Be Bullish But beware. It is possible that both situations could happen before the week’s end. The LMACD could cross down and turn the histogram red for the first time in 2023 and shake out those eager to jump the gun on the sell signal. After the shakeout, the tool could diverge up before close and continue to push momentum and price to new highs. Alternatively, the tool could diverge upward at this inflection point, only to later cross back down. What is for certain is that the current lack of a decision in price direction is about to end, according to the LMACD. Tony is the author of the CoinChartist (VIP) newsletter. Follow @TonyTheBullBTC @coinchartist_io on Twitter. Or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice. Featured image from iStockPhoto, Charts from TradingView.com

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