A Bitcoin technical trend indicator may be signaling a price increase for the number one cryptocurrency after what has been a tough year for it.
Bitcoin on the Up?
Since the beginning of 2018, the cryptocurrency market has been struggling. Bitcoin’s high of nearly $20,000 in mid-December seems like a distant memory as it continues its battle to regain the $10,000 mark. At the time of publishing, Bitcoin is trading at $6,376, according to CoinMarketCap. This represents a 3.38 percent drop in 24 hours.
Yet, while the price of Bitcoin may be in a rut right now, it may soon see a positive turn.
In a report from Bloomberg, the Divergence Analysis Inc.’s (DVAN) Buying and Selling Pressure Indicator, which charts the coin’s current price, trend line, and ideal exit points, is suggesting that the selling trend that started on May 14th could be ending soon.
According to the report, when the stop and trend lines cross, the price of Bitcoin may experience a reverse in price. The last time this took place was April 13th. Consequently, the cryptocurrency’s price soared from $7,903 to $9,600 on May 4th. Last Friday, the same thing happened. Notably, while it wasn’t a massive jump in price, Bitcoin rose two percent on Monday to $6,693.
It remains to be seen if it will happen again, and by how much.
Or Is a Bad Year for Bitcoin Set to Continue?
The DVAN indicator comes several weeks after an index suggested that the rest of 2018 was going to continue badly for the cryptocurrency.
In June, it was reported that the Directional Movement Index was suggesting that Bitcoin was on its strongest negative trend since the sell-off earlier this year. At the time, the index’s ADX line was at 39.3. However, anything above 25 is deemed a strong trend.
With such a gloomy picture being painted, only time will tell whether it goes up or down.
Despite this, though, optimism remains, in a roundabout way. In the opinion of Clem Chambers, CEO of ADVFN, a financial market website, Bitcoin’s price will “probably” drop first before rallying. Speaking earlier this month, he said that it’s likely to fall to $2,000. However, he added that he thinks Bitcoin will hit $20,000 and possibly $100,000 as well.
He believes the crypto asset will rise due to a lack of fiat currency in circulation. For him, cryptocurrencies are filling that void, creating an economic life. For many, it’s not a case of if digital currencies become mainstream, but when.
Do you think the DVAN is a good indicator of market prices? Let us know in the comments below.
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