Bitcoin price is back in the mid-$50,000 range, after several rejections from resistance at above $60,000 per coin. A visit to support levels to test demand much lower might soon become a reality now that a technical indicator measuring momentum has flipped bearish for the first time since 2020.
Here’s what this could mean for the leading cryptocurrency by market cap’s current bull run.
Bitcoin Momentum Turns Bearish For First Time Since Late 2020
When Bitcoin broke above $13,000 and set a higher high for the first time beyond the 2019 peak, momentum carried the cryptocurrency tens of thousands of dollars higher. At the current peak, each BTC was selling for a high of just below $62,000 but after repeated failed attempts to rally higher, that bullish momentum is beginning to fizzle out.
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The Moving Average Convergence Divergence indicator, while considered a lagging indicator, has begun to turn down on weekly timeframes for the first time since the big bullish breakout back in October 2020.
Bitcoin has crossed bearish on the weekly LMACD for the first time since the bullish breakout in October 2020 | Source: BTCUSD on TradingView.com
Both a bearish crossover of the two moving averages and the histogram flipping red suggests that momentum has begun to turn downward, and a correction is likely.
The signal is only valid if the weekly candle closes below around $54,500, in which the bearish crossover will be confirmed.
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