By Jeff Clark, Jeff Clark Trader, Trades Of The Day, 2024-08-13
For anyone looking to buy Bitcoin, the current setup is the best we've seen since the King of Cryptocurrencies peaked in April.
We turned bearish on Bitcoin in April when we noticed a seasonal tendency for it to fall during the summer months. We reiterated that bearish stance on June 25. And, we stayed bearish on Bitcoin in July.
Now, however, we're starting to turn bullish.
I'm not suggesting the decline is over… or that Bitcoin is headed “to the moon” anytime soon. I'm merely stating the obvious – that folks who wanted to buy Bitcoin in April near $72,000 will do much better buying it today closer to $54,000.
The Best Summer Setup for Bitcoin
The seasonal pattern of Bitcoin selling off during the summer has played out. Now, the chart is showing signs of a potential bottoming pattern – which could lead to a reversal higher in the weeks ahead.
Take a look…
Bitcoin has fallen hard over the past two weeks – losing about 20% of its value. It's now trading at its lowest price since February.
But as the price of Bitcoin has dropped to a lower low, two of the three momentum indicators at the bottom of the chart are forming higher lows. This sort of “positive divergence” is bullish.
It's often an early warning sign of a potential reversal from a bearish trend to a bullish one. In this case, the positive divergence is signaling a possible rally for the King of Cryptos.
To be clear…
it's not a guarantee. If Bitcoin continues to tumble in the days ahead, the positive divergence could disappear.
As it stands now, though, it looks to me like Bitcoin is shaping up for a rally as summer slowly turns to fall.
And, as I wrote earlier, if you were looking to buy it in April at $72,000, buying Bitcoin here at $54,000 is a much better deal.
Best regards and good trading,
Jeff Clark
Editor, Market Minute
Source: Jeff Clark Trader
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