Bulls Regain Control Over Bitcoin Trend Strength: What To Expect
October 04 2021 - 5:26PM
NEWSBTC
Bitcoin bulls are back in charge, so to speak. The headline alone
makes quite a statement, and there are no doubt several readers
questioning how one might draw such conclusion after only a small
move and lack of new highs. The conclusion has been made for us
all, depending on what the Average Directional Index is currently
saying about an asset – in this case the top cryptocurrency by
market cap. Let’s take a look what the trend strength measuring
indicator says about Bitcoin price action. Tug-Of-War Ends With
Bears Falling Flat Last week, after several weeks of chop and
stalemate, Bitcoin broke out from short-term downtrend resistance,
and is close to making it though high timeframe resistance as well.
The shots fired from bulls might have actually been the starting
pistol ahead of the final leg of the bull run, according to the
Average Directional Index. Related Reading | Bitcoin Trend Strength
Indicator Suggests Bull Run Isn’t Yet Over In technical analysis, a
reading on an indicator either is or it isn’t – meaning, for
example, the MACD can only be crossed bullish or bearish, not both
at the same time. The Average Directional Indicator is a trend
strength measuring tool that typically comes with two built-in
directional indicators – a positive and a negative. The ADX itself,
simply says how strong the trend is, and the positive and negative
DI tell who is in control. They make reading the tool very
straightforward: green crossed above red is bullish, and red above
green is bearish. From that description alone, who is currently
winning the battle of Bitcoin, as pictured below? Bulls just took
over the daily trend | Source: BTCUSD on TradingView.com Bitcoin
Price Remains Bullish On High Timeframes The green line only just
took over from bears, so bulls only recently regained the
upper-hand on the lowest timeframes. Bearish traders were expecting
different results, because the weekly setting using this indicator
is currently negatively crossed. Related Reading | Bitcoin Ready
For Display Of Strength, But Which Direction Will It Break What was
able to leave bears blindsided, however, was the fact that the
highest timeframes still show plenty of strength left for bulls.
Any recent downtrend was an attempt to feign weakness by bulls,
according to the indicator’s readings. The ADX shows plenty of bull
trend left | Source: BTCUSD on TradingView.com The ADX itself,
depicted in the dark blue line, hasn’t yet begun to turn downward.
When it does, it could be a sign that the bull trend is finally
ending. After the peak in 2017, Bitcoin never truly broke bearish
when compared to the 2014 bear market. When bears finally do regain
control over Bitcoin price, the worst bear market ever could
follow. Follow @TonySpilotroBTC on Twitter or via the TonyTradesBTC
Telegram. Content is educational and should not
be considered investment advice. Featured image from
iStockPhoto, Charts from TradingView.com
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