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Here's How New Bitcoin Rally Might Start: Bloomberg

Wed, 01/05/2022 - 11:12
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Arman Shirinyan
Bitcoin is showing the first signs of a recovery, here's how
Here's How New Bitcoin Rally Might Start: Bloomberg
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Bitcoin's rally to $65,000 ended a long time ago, with the asset swiftly dropping to the range of $45,000. Bitcoin has been continuously moving in the range for the last month, and the low volatility might indicate that the long consolidation is close to being over.

According to Bloomberg's article, the 30-day volatility of the asset is currently moving at its lowest point since September in addition to the price action of the largest cryptocurrency staying negative. As the article suggests, it is "showing short-term exhaustion signals."

Demark Indicator

In order to determine whether the asset's price movement is "exhausted," traders use the Demark Sequential indicator which acts based on the price's history. The indicator is a technical analysis tool, which compares an asset's recent extremes with the previous period's equivalent price.

Bitcoin Chart
Source: Bloomberg

The methodology allows traders to compare the current demand of the asset with previous periods and determine the directional trend on the market. Some traders compared Demark with the RSI indicator, but the two tools work different, with the RSI counting closing levels only when the abovementioned indicator includes both highs and lows of a specific period.

What does Demark indicator show on Bitcoin?

According to the indicator, Bitcoin has formed a "9-13-9" pattern, which is considered one of the strongest "exhaustion" signals in the technical analysis field. The same pattern appeared back in March 2019, when Bitcoin was trading at approximately $3,800.

Banking Giant Goldman Sachs Sees Bitcoin Hitting $100,000

At press time, Bitcoin is trading at $46,000 and showing 2% growth. In the last seven days, Bitcoin's price has changed by 0.6%, which is considered extremely low volatility.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.