After trading below $30,000 for nearly a entire week Bitcoin experienced a sharp bullish divergence late on the 22nd of May on a Sunday. As of press time Bitcoin has traded 2.5 percent higher than its key resistance of $30,000 levels.
A well-known cryptocurrency analyst Lark Davis writes: Bitcoin bullish divergence
Bitcoin is undergoing a massive bullish divergence on the day. The last time that we saw similar events was 2021. Could this be a sign of a major rally is brewing?
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What exactly is Bullish Divergence?
A bullish divergence happens when prices plummet to new lows while an oscillator is unable to make the new low. This indicates the fact that bears have lost strength which means that bulls have become preparing to get control of the market again. Usually, when a bullish divergence signals the beginning of a downward trend.
Davis also states that while the macro-economic environment in general is at present a source of concern, there is some optimism after all the negative sentiment. It is going to be interesting to see whether Bitcoin might be able to turn this obstacle to a high-support zone. In the past, $30,000 has been a crucial base of support for Bitcoin.
Noting the trendline between lower lows and lower highs, Davis notes that we could see a possible relief rise to as high as $37,000. At this point we could be toward the 200 day average. However, this could also indicate that there is a chance of Bitcoin price falling to an all-time low of $22,000 prior to making a clear break to the positive side.
Bitcoin bullish divergence
Bitcoin On-chain Metrics:
The on-chain metrics of Bitcoin continue to demonstrate the strength of Bitcoin at a fundamental level. The number of Bitcoin addresses that hold more than one Bitcoin has reached an record-breaking high, which is close to 1 million.
Lark Davis Share on Twitter Social Media:
— Lark Davis (@TheCryptoLark) May 23, 2022
As there is a reason that Bitcoin Fear and Greed Index remains in the zone of extreme fear Whales have been conducting some bottom-fishing. According to data from Glassnode, Bitcoin whale addresses that hold more than 10k BTC are increasing in the wake of the market’s recent crash.
Crypto Rovel Said on Twitter:
— Crypto Rover (@rovercrc) May 22, 2022
It is evident that the weak have been taking a break from the market, and have been transferring their assets to the large sharks in the marketplace. One thing to be cautious about could be the increase in Bitcoin supply on exchanges. It’s been a feature in every bear market. Investors have had enough of the blood A bullish reversal may be beneficial.
Bitcoin bullish divergence
Source: Google News Trend