Reason? Showing love. Let’s see if we can’t make some money here or figure out what’s going on at the very least.
If you have any alerts set or you’ve been checking various apps, then you likely noticed that Bitcoin has made some fairly decent gains over the past 24 hours. Let’s take a look briefly.
In the screen above, we can see that BTC has appreciated ~17% over the past four days, which is pretty astronomical (roaring); however, it still isn’t over the ever-present overhead resistance at $50k (we’ll take a look at that in a second).
First, let’s pan out a bit though because it appears the faint outline of a ‘double bottom’ can be made out. There are a few caveats we should take into account before declaring that this pattern exists, however.
Hopefully viewers can make out the blue lines that were overlaid on the chart above (to trace out the double bottom chart formation, potentially).
Quick Refresh: Double Bottom Chart Formation
As the name suggests, a ‘double bottom’ occurs when the price has failed to move past a certain support point twice with an interim spurt of bullish activity.
This chart pattern is one of th easiest to identify since it looks just like it sounds.
There are a few ‘checks’ that must be confirmed (to ensure an accurate reading here).
Running Checks on Potential Double Bottom Chart Formation
First thing we’re going to do is see just how far the price fell from the apex of the left side of the ‘W’ to the first support (#1 bottom of the double bottom ).
-23.35% drop from the peak that was hit on September 5th (~$53k) to that first ‘bottom’ of the double bottom chart formation for Bitcoin (September 21st, 2021) around $40k.
From that point, the price rose to form what we’ll consider the ‘neckline’ at $44k a few days later.
From there, the price dropped -8.54%.
Of course, from that point (approx. 4 days ago), the price rose ~17-18% to bring us where we’re at now at the time of writing.
Let’s go ahead and add the volume bars to ensure that the double bottom formation’s volume pattern ( Bitcoin ), matches the expected activity (classically).
If not, that’s fine – we can forgive that, the main point isn’t to identify the formation so much as extracting the main point here, which is that the bulls were able to firmly prevent bears from pushing the price any further than $40k, which has served as a price range of contention in the past.
The volume has risen in step with the price increase over the prior 3-4 days. This is a very positive sign for bulls.
With that being said, let’s check out what some of our other indicators are giving us (reading), starting with the Balance of Power RSI .
Librehash Balance of Power RSI
The upward trend in the Balance of Power RSI’s trajectory is significant. However, as customary, let’s go ahead and plot this trajectory via an overlaid arrow (we are not plotting a resistance / support line here, so the arrow will crossover the indicator line as well).
Its worth noting that this trend spans back all the way to September 12th/13th. This is another significantly bullish reading (very good news for bulls at this point).
Librehash RSI
Similar to what we just saw with the Balance of Power RSI , the Librehash RSI is providing us with a significantly bullish indication.
There isn’t too much to say here. Usually our analyses would be a bit more comprehensive than what you see here, but Bitcoin’s bullish trajectory seems evident at this point.
However, before closing out here, we’re going to take a look at the Librehash Reversion Ribbon V2.
Librehash Reversion Ribbon V2
The ribbon is actually showing us some interesting signs of waning bullish momentum on the daily resolution (which is interesting).
Zooming in here on the daily resolution , we can see that the most recent 2/3 candles are dark green with a red outline.
The histogram in the background shows convergence (read it like the MACD ). However, this could be intermittent. Please note, we’re on the H12 resolution.
Conclusion
Bitcoin looks bullish . Not sure if there’s enough upside for this to warrant a valid R/R, but we’ll go ahead and plot one anyway.