Firstly, let me start by saying that exhaustion in price action does not mean reversal.
On strong momentum moves, the smallest pullback can ‘reset’ fairly quickly, so this is not a fear-mongering update at all, just an observation.
Personally, I’m in the buy-and-hold camp when it comes to BTC because I don’t have the appetite to trade it short-term, but for those who do these type of market signals are usually worthwhile looking into.
On the weekly, we’ve seen a gnarly looking bearish divergence for BTC.
And we are seeing the same play out on the daily as well…
After the recent run higher, it should not come as a surprise that some participants will be looking to take some profit off the table.
The big question with this type of divergence is whether it signals a short-term shake-out, or a deeper and more uncomfortable pullback.
As always, that part is up for debate and depends on which side of the bias spectrum you look from. For the bulls, as a minimum, should spark some questions on whether more profit taking should be considered.
For the bears, key support comes in around 112K
