Bitcoin value is nonetheless struggling to maintain onto assist at $30,000 on excessive timeframes after smashing via it greater than every week in the past now.
With patrons stepping in after the plunge, there is an opportunity for bulls to cease the draw back with a bullish reversal candlestick setup. Learn extra concerning the potential setup and discover out if it’s “hammer time”.
A Bullish Hammer Could Put A Stop To The Bear Market
You wouldn’t essentially understand it by the extremely bearish sentiment or the latest plunge and ensuing panic throughout the crypto market.
But in the event you take a look at medium timeframe value charts, Bitcoin bulls may very well be making ready out a cease to the bleeding and stage a bullish hammer reversal.
Related Reading | This Expanding Triangle Pattern Could Be The Last Hope For Bitcoin Bulls
Japanese candlesticks are mentioned to be developed by the so-called “God of Markets,” Honma Munehisa. Homna was a rice dealer and wrote the primary ever ebook in market psychology.
Candlesticks are comprised of a physique and shadow, usually known as a wick. They are sometimes depicted as purple and inexperienced, or white and black (open and closed). Each candle consists of data on the open, shut, low, and excessive of the buying and selling session it represents.
How the candle opens, closes, and the highs and lows set throughout the session will form the candle, and sometimes present details about what could be happening out there — and what would possibly come subsequent.
Could this hammer put a cease to bears? | Source: BTCUSD on TradingView.com
The Technicals Supporting A Bitcoin Reversal Setup
On BTCUSD weekly and 2-week timeframe charts, the highest cryptocurrency is engaged on a bullish hammer. A bullish hammer is a characterised as having a protracted decrease wick appearing because the deal with, a small higher physique, and little to no higher shadow.
Although the bullish sign solely takes one candlestick to recommend a backside is in, it is solely confirmed with a robust observe via again to the upside.
There are loads of technicals supporting a reversal | Source: BTCUSD on TradingView.com
Hammers are only when they observe a string of no less than three down candles, and are supported by bullish technicals.
The bullish hammer is occurring at what may very well be the top of a wave 4 increasing triangle correction, in accordance to Elliott Wave Principle. The MACD is retesting the zero line, a lot because it did throughout the wave 1 Black Thursday correction. Each backside, additionally coincidentally touched the decrease Bollinger Band earlier than reversing to the upside.
Related Reading | Bitcoin Bear Market Comparison Says It Is Almost Time For Bull Season
Will this bullish hammer verify, and cease the massacre from persevering with?
Here is a 🧵 on my full Elliott Wave evaluation on #Bitcoin and why I don’t consider there is a bear market – and why I anticipate the final leg up any day now.
— Tony “The Bull” Spilotro (@tonyspilotroBTC) May 15, 2022
Follow @TonySpilotroBTC on Twitter or be part of the TonyTradesBTC Telegram for unique day by day market insights and technical evaluation training. Please word: Content is academic and shouldn’t be thought-about funding recommendation.
Featured picture from iStockPhoto, Charts from TradingView.com