Bitcoin's first 'perfected' TD9 indicator downtrend setup since July 2022 suggests a potential reversal, while RSI divergences hint at bullish momentum. However, traders should remain cautious as the
In an unexpected turn of events, Bitcoin’s bear market has been declared dead after delivering its first 'perfected' TD9 indicator downtrend setup since July 2022. This development marks a significant inflection point in what was previously seen as a long-term downward trend.
The key figures involved include analyst Tony Severino, who flagged the signal on Tuesday, and trader Scott Melker, who highlighted bullish divergences across multiple time frames using RSI data. The TD9 indicator is derived from Tom DeMark’s Sequential market timing tool, which alerts traders to potential trend changes based on nine consecutive candles.
The setup occurred in Bitcoin's monthly chart, where nine consecutive candles closed higher than the closing price four candles prior, marking a definitive uptrend signal. This comes after months of bearish sentiment and marks the first time since July 2022 that such a pattern has been observed at this scale.
While not a direct buy signal on its own, the TD9 setup is considered significant as it suggests potential bottoming behavior in the market. Analysts like Tony Carrera have noted that while the indicator does not guarantee an immediate reversal, traders should pay close attention to any sustained holding of these levels into the close.
Bullish divergences on RSI further support this view, with Scott Melker pointing out a high likelihood of trend change based on multiple confirmed and potential bullish divergences. These signals are seen as strong indicators that Bitcoin may be entering its final stages before a significant upward movement.
However, despite these positive signs, the broader market sentiment still favors new macro lows coming into play before any definitive reversal can occur. The consensus among traders is that while the bear market has shown signs of weakening, it remains too early to call for a full-scale bullish rally.
Traders should closely monitor both technical indicators and broader market conditions as they navigate this volatile period. Key watch points include further TD9 signals and sustained RSI divergences over multiple time frames.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.