Bitcoin bulls are back in charge, so to speak. The title alone makes a clear statement, and no doubt many readers wonder how one can come to such a conclusion after only a small movement and no new heights.
The conclusion has been reached for all of us, depending on what the average trend indicator is currently saying about an asset – in this case, the top cryptocurrency by market cap. Let’s take a look at what the trend strength indicator has to say about bitcoin’s price action.
Tug-of-War ends with bears falling flat
Last week, after several weeks of disruption and stalemate, Bitcoin broke out of short-term downtrend resistance, and is close to achieving it despite higher time frame resistance as well.
Bullets fired from the bulls may actually be the starting gun before the final leg of the bull run, according to the Average Trend Index.
Related reading | Bitcoin Trend Strength Indicator indicates that the uptrend is not over yet
In technical analysis, the reading on an indicator is either or not – meaning, for example, the MACD can only be crossed bullish or bearish, not both at the same time. The average trend indicator is a tool for measuring trend strength which usually comes with two built in trend indicators – positive and negative.
The ADX indicator itself simply indicates how strong the trend is, and the positive and negative DI tell who is in control. It makes the instrument’s reading very clear: green crossed over red is bullish, and red above green is bearish. From this description alone, who is currently winning the battle for Bitcoin, as shown below?
Bulls just took over the daily trend | Source: BTCUSD on TradingView.com
Bitcoin price remains bullish on higher time frames
The green line just captured the bears, so the bulls have recently regained the upper hand on the lower time frames. The bearish traders were expecting different results, because the weekly setup using this indicator is negatively crossover at the moment.
Related reading | Bitcoin is ready for a show of strength, but any trend will be broken
However, what was able to leave the bears dazed was the fact that the higher time frames still showed a lot of residual strength for the bulls. Any downtrend lately has been an attempt to pretend bulls are weak, according to indicator readings.
The ADX shows plenty of bull trend left | Source: BTCUSD on TradingView.com
The ADX indicator itself, indicated by the dark blue line, has not yet begun to turn down. When that happens, it could be a sign that the uptrend is finally over.
After the peak in 2017, Bitcoin hasn’t really broken the downtrend compared to the bear market of 2014. When the bears finally regain control of the Bitcoin price, the worst bear market ever could follow.
Continued TonySpilotroBTC on Twitter or through TonyTradesBTC Telegram. The content is educational and should not be considered investment advice.
Featured image from iStockPhoto, Charts from TradingView.com