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After months of sell-off and bearish price action, the Bitcoin price finally closed the trading week up in profit.
This more than +6% surge for the week as brought back a lot of bullish enthusiasm from Bitcoin traders all over the world. Some of them are even calling this price surge the start of a new bullish run for Bitcoin in 2022.
However, in this Bitcoin analysis we will be breaking down 3 key things wrong with the Bitcoin bullish rally and what it might mean for the Bitcoin bulls in the coming days.
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1) Watch This Key Bearish Pattern!
The first key issue we have with this Bitcoin price rally is the formation of a key bearish pattern on the 1-hour timeframe.
The exact pattern we are talking about is an Ascending Channel Pattern currently playing out on the BTC 1-hour price chart.
This pattern is a reversal pattern and usually comes into play when price wants to change trend. For Bitcoin, that would be a trend change to the downside.
In our next article: Trading The Ending Diagonal Pattern On Bitcoin we will be breaking down exactly how we plan to take advantage of this key pattern and what we need to look for potential trades to the down side.
2) Bitcoin Trading At A Key Resistance!
The second issue we are seeing in this Bitcoin bullish rally is the presence of a massive key resistance just above the current price location of Bitcoin.
This $46,039 key resistance level on the 1-hour timeframe as served as a major price level for Bitcoin sellers to sit at and push prices back down multiple times in the past
That can only mean that we might see this kind of bearish pressure come back into play around this region in the coming days. Can the bulls breakthrough or will this just be another failed rally?
3) Price And MACD Divergence!
The last key factor we are watching is the Price/MACD divergence currently playing out on the 1-hour timeframe.
This bearish divergence between price and the MACD indicator is a strong signal that the Bitcoin bulls and the price move higher is losing steam.
If volume does not come back into the Bitcoin price soon, there is a very high probability that we might see the BTC price correct in the coming days.
Final Verdict!
When you bring the whole factors we mentioned above together, we get a clear picture of exactly what is going on with Bitcoin. And the image we are getting is that of a likely reversal and price crash happening soon!
In our next article: Trading The Ending Diagonal Pattern On Bitcoin we will be breaking down exactly what we are looking for as well as how we plan to take advantage of this bearish signal for a potential trade to the downside.
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