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Start for freeBitcoin's Hidden Warning Signal
The cryptocurrency market is constantly evolving, and traders must stay vigilant to identify potential trend shifts. Currently, a significant hidden warning signal is flashing on the Bitcoin chart, despite the price continuing to show overbought signals in the short term. This article will delve into the current state of Bitcoin, Ethereum, and Solana, examining their charts, trends, and potential future movements.
Bitcoin's Daily Chart Analysis
On the daily Bitcoin chart, a hidden bearish divergence is forming. This divergence is characterized by lower highs in the Bitcoin price chart and higher highs in the Bitcoin RSI (Relative Strength Index) on the daily timeframe. It's important to note that this hidden bearish divergence is different from a traditional bearish divergence:
- Traditional bearish divergence: Higher highs in price, lower highs in RSI
- Hidden bearish divergence: Lower highs in price, higher highs in RSI
The hidden bearish divergence is typically not as strong as a regular bearish divergence but serves as a trend continuation pattern. In this case, it points towards the continuation of the larger bearish trend that has been observed for some time.
However, it's crucial to understand that this signal is currently flashing but not yet confirmed. For confirmation, we need to see at least one, ideally two, red candle closes on the daily timeframe. As of now, this confirmation has not occurred.
Short-Term Bullish Trend Continuation
For the short-term bullish trend to continue, Bitcoin needs to break out above the resistance level of approximately $64,500 in the next few days. If the price continues to struggle and face rejection at this level, it's likely that we'll see a continuation of the larger bearish trend.
Support and Resistance Levels
Key support and resistance levels to watch include:
Support:
- Just under $63,000
- Around $62,000 (approximately $61,900)
- Major support area between $60,200 and $61,200
Resistance:
- Between $64,100 and $64,500
- Major resistance area between $67,000 and $68,000
A confirmed breakout above $68,000 would be necessary to flip the longer-term trend bullish again.
Short-Term Cooling Off
The recent short-term cooling off in Bitcoin's price was expected due to the overbought signal that confirmed in the 4-hour RSI just over a day ago. This signal indicated that the price was running out of room to the upside in the immediate short term and was due for a reset in the RSI.
Currently, the 4-hour Bitcoin RSI is no longer in overbought territory and is closer to neutral levels. This reset has given more room for potential upside movement.
Potential Scenarios
There are two main possibilities for Bitcoin's short-term price action:
- The cooling off could play out similarly to previous instances, with a couple of days of short-term pullback or sideways price action before continuing the bullish trend.
- If the pullback lasts for a week or more, it would likely signal the end of the short-term bullish trend and a continuation of the larger bearish trend.
Bitcoin Liquidation Heat Map
The Bitcoin liquidation heat map shows interesting developments:
- Major liquidity building at around $62,300
- Liquidity to the upside at approximately $64,200 to $64,500
These areas are important to watch in the short term. There's a possibility of choppy sideways price action to take out both levels of liquidity.
Ethereum Analysis
Ethereum's 3-Day Timeframe
Ethereum is currently bouncing from a major area of support between $2,150 and $2,200. This area continues to act as strong support.
Key resistance levels:
- Critical resistance at around $2,800
A confirmed breakout above $2,800 would be necessary to flip the longer-term trend bullish for Ethereum.
Short-Term Bullish Trend Within Larger Bearish Trend
Ethereum is currently experiencing a short-term bullish trend within the context of a larger bearish trend. This is primarily due to a massive bullish divergence that has been playing out over the last couple of weeks.
Ethereum's 3-Hour Timeframe
On the 3-hour timeframe, Ethereum's RSI has entered overbought territory over the last couple of days. This suggests that Ethereum is reaching an upside limit in the short term and is likely to experience some choppy sideways price action or a slight pullback over the next one to two days.
Solana Analysis
Solana's Daily Timeframe
Solana is currently holding above a major area of previous resistance, which should now act as support. This area is between $138 and $143.
Key resistance levels:
- Minor resistance at $153 to $154
- Major resistance between $159 and $163
A bullish divergence is still actively playing out for Solana, indicating that the shorter-term trend remains bullish.
Short-Term Cooling Off
Solana is experiencing a short-term cooling off period, which was expected due to an overbought signal confirmed on the 8-hour RSI. This cooling off is likely to continue for the next one to two days.
Support and Trend Continuation
As long as Solana holds above the $138 to $143 area, it can technically remain within the bullish trend. A break below $138 would signal the end of the short-term bullish trend and a return to the choppy sideways price range.
Trading Opportunities and Platforms
For those looking to trade these moves in cryptocurrency prices, there are several platforms available:
- Bybit: Offers up to a $30,000 deposit bonus and a chance to win up to $100,000 in a Lucky Draw promotion.
- Bonex: An alternative for those who cannot access or KYC on Bybit, offering a potential $5,500 deposit bonus and a 10% discount on all trading fees.
It's important to note that trading cryptocurrencies carries inherent risks, and it's crucial to conduct thorough research and risk management before engaging in any trading activities.
Conclusion
The cryptocurrency market continues to present both opportunities and challenges for traders and investors. Bitcoin's hidden bearish divergence serves as a warning signal, while Ethereum and Solana show signs of short-term bullish trends within larger bearish contexts.
Key takeaways:
- Bitcoin needs to break above $64,500 soon to continue its short-term bullish trend.
- Ethereum is bouncing from support but faces resistance at $2,800.
- Solana is holding above support but experiencing a short-term cooling off period.
As always, it's crucial to consider multiple timeframes and indicators when making trading decisions. The cryptocurrency market's volatile nature requires constant vigilance and adaptability. Stay informed, manage your risks, and always be prepared for potential trend shifts in this dynamic market.
Article created from: https://youtu.be/u4ZHEaUjg8w?si=MNeLqhUNJnJ5fL0l
