The price of Bitcoin (BTC) has risen from less than $ 17,600 to $ 18,400 in the last 24 hours. There are now two main technical indicators that indicate a possible larger recovery.
The 4-hour bitcoin price chart shows bullish deviations, as does the TD9 buy signal. Both indicators usually light up when the asset shows strong sales and sales pressure is exhausted.
Selling bitcoins can lose momentum
The 4-hour bullish deviation and the TD9 buy signal are conceptually close in that they both appear after a sharp correction.
A bullish deviation is a technical pattern that is about relative strength index (RSI). Relative Strength Index (RSI) is a momentum indicator that measures whether an asset is overbought or oversold.
The RSI has a scale from 0 to 100; Less than 35 means that the asset is oversold, and more than 75 means that the asset is overbought. If the RSI falls below 35 and begins to recover with the asset, a bullish deviation is displayed.
Bitcoin price chart for 4 hours with relative strength index. Source: TradingView, Scott Melker
Cryptocurrency trader Scott Melker said the 4-hour bitcoin price chart showed a bullish divergence as the price jumped above $ 18,150. He said:
“We all know that we have confirmed a bullish deviation when the RSI is oversold. The RSI currently weighs against the reverse resistance. If the price continues, it should follow the price. I do not intend to end the longer period now. ”
As Cointelegraph previously reported, Bitcoin came under significant pressure from whales and miners last week. As a result, the BTC price has fallen sharply in the last two days, which has led to oversold conditions in lower time frames, such as the 4-hour chart.
A trader under the alias CryptoISO confirmed that the TD9 buy signal is oversold.
TD9, short for Tom Demark 9, is an indicator that also measures whether an asset is overbought or oversold, similar to RSI. A TD9 buy signal is displayed when all the last 9 lights are below the previous 4.
For example, suppose the price of bitcoin in the last 36 hours was less than $ 19,000. If the 4 o’clock closed 52 hours ago exceeds $ 19,000, the TD9 buy signal will light up.
The combination of a 4-hour bullish divergence and a TD9 buy signal indicates that Bitcoin has been significantly oversold in the last three days.
As reported by the Cointelegraph, whale groups show $ 17,170 and $ 17,700 as large levels of support. As long as Bitcoin remains stable above these two levels, the chances of continuing the rally remain high.
Another favorable factor over the level of support for the two groups of whales is the increase in supply of Tether (USDT), which has a market value now approaching $ 20 billion.
On large bitcoin exchanges such as Binance, for example, investors often store side capital in USDT instead of cash, as this allows them to quickly reopen positions. The continued increase in the USDT offer is a positive sign of growing confidence in Bitcoin.