Why This Bitcoin Indicator Points To Bullish Double Bottom
Bitcoin continues to push to the upside closing several daily candles on the green, positively impacting the crypto market. At the same time, the benchmark cryptocurrency trends upwards, and the general sentiment shifts into greed territory for the first time since May 2022.
At the time of writing, Bitcoin (BTC) trades at $20,850 with a 1% profit in the last 24 hours and a 9% profit in the previous week, respectively. Ethereum (ETH) and Dogecoin (DOGE) are the best performers in the top 10 by market cap on similar timeframes.
Bitcoin Rally Likely To Continue?
Bitcoin and the crypto market displayed a high correlation with traditional finances. However, digital assets have been moving against the trend over the past few days.
While Amazon, Netflix, Apple, Meta, and other big tech companies tanked due to low earnings, Bitcoin broke above critical resistance at $20,500. In that sense, BTC and the crypto market closed in the green with the weekend approaching.
With traditional markets closed, cryptocurrencies are free to score more profits. The bullish momentum extended on traders’ disbelief and because of Dogecoin and Ethereum’s push to the upside.
The king of the meme coins rallied this Friday after Elon Musk confirmed the acquisition of the social media platform Twitter. The bullish price action in the crypto market led many traders to open short positions, fueling any higher upside trend.
When highly leveraged positions are liquidated, the market can continue the trend. This status quo will likely persist over the weekend but might face headwinds during the week. According to crypto analyst Justin Bennett:
That strong close to the week from equities is probably reason enough for #crypto to pump this weekend. Throw in the massive $BTC short liquidations above $21k, and you have another reason. I’m less optimistic about Monday though given where equities closed on Friday (…). Shorts are still piling in, and there are still a ton of liquidations above these highs. This pump most likely isn’t done yet.
If traditional markets rebound from last Friday’s levels, Bitcoin and the company will follow. A pseudonym trader pointed to the On-Balance-Volume (OBV) indicator, a metric used to measure market momentum. The metric formed a double bottom and resumed its uptrend, hinting further appreciation.
#Bitcoin – OBV going strong after finding a double bottom. The true bottom indicator. pic.twitter.com/s6JgTqjIeT
— IncomeSharks (@IncomeSharks) October 29, 2022