Long-Term Indicator -MACD- Suggest Bitcoin May Be Nearing Bottom

According to a long-term price indicator, a growing number of investors believe that bitcoin (BTC) is nearing bottom.

The moving average convergence differential (MACD) is a momentum indicator based on the price moving average, which indicates a weakening bearish pressure.

Currently, bitcoin's weekly MACD has deviated from the main bearish trend, and created a higher low which is known as a bullish divergence. Bullish divergence is usually considered a sign of sellers exhaustion and is often accompanied by a reversal of trend.

According to CoinDesk, bitcoin dropped below the key psychological support level of $6,000 on November 14, 2018, destroying hopes of a long-term bullish reversal.

The massive sell-off stopped in December as bitcoin was trading near $3,100, sparking speculation that the cryptocurrency could rebound in 2019. Notably, it happened once back in January 2015 that BTC created a long-term bottom and then saw a price reversal in July 2016. Therefore, investors are betting that history will repeat.

As of writing, Bitpush data shows bitcoin trades at $3,611, down 0.51% in 24 hours.

There are reasons to believe that bitcoin is nearing or has hit bottom, because MACD created a higher low on the weekly chart. As a result, the probability of a bullish reversal for BTC is high in the coming months.

A move above the 21-month exponential moving average (EMA) would confirm a shift from long-term bearish to bullish. As of writing, the average is $5,334.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Image: pexels.com

Author: Max Li

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