In this episode of NewsBTC’s daily technical analysis videos, we examine a recent showing from bulls after a bloody Monday morning open in Bitcoin price action.
VIDEO: Bitcoin Price Analysis (BTCUSD): September 19, 2022
We had our weekly Bitcoin close last night. Last night saw a sharp plunge into the $18K area overnight. However, the prices rose by over 5% since Monday’s 9 AM open. This has left a very long trail.
Bears Stop Bulls With Short Time
A hammer formation is occurring in Bitcoin prices. A hammer, a bullish signal that is used in Japanese candlesticks to indicate a sudden and large presence of bulls when a certain price goal has been met, can be described as a bullish reversal signal.
On daily timeframes, there isn’t all that much significant going on otherwise to confirm the signal. The reaction was again witnessed when the price touched the Bollinger Bands lower. The RSI indicates that the strength of the move, despite its depth, was weak.
Stochastic also fell to the oversold level. While it is tempting to keep the price above its limit, this can lead to rallies in short-term. But as we can see from past prices, they can also fall back.
Despite the steep plunge, bears were not strong. Source: TradingView.com's BTCUSD.| Source: BTCUSD on TradingView.com
A Weakening Weekly Momentum could be ready to turn
Today is the first day in Bitcoin’s week. The Bitcoin weekly candle currently stands at a hammer. It is likely that it will not stay this way for several more days. The head of the Hammer, also known as the real candle body is just above its former high resistance.
If you zoom in, it is easy to see why bulls found this move particularly demoralizing. After months of building positions, any traders that entered leverage will be stopped. Only those who entered the wick up to $17,000.500 position remain in a long one.
New lows seem to be inevitable given the current macro environment and extreme bearish sentiment. But, the bearish sentiment has started to wane over the past week, which would be a good sign for a hammer candle. A sustained rally is possible if bulls close the weekly histogram with bulls in the green.
It is similar to the 2018 bear markets bottom. Once crossed, Bitcoin has never recovered those levels.
Source: BTCUSD on TradingView.com| Source: BTCUSD on TradingView.com
ETHUSD September 15, 2022| ETHUSD September 15, 2022
Bitcoin bulls have 11 days to save September
Only 11 days remain in the monthly candle. These are the last remaining bulls to keep a bigger selloff of BTC.
Even though the candle is ugly now, it can be compared to previous levels that saw a significant reverse. A doji pattern to close September could be the beginning of a cluster of support forming that tells the market new lows won’t be happening.
Bulls have to show strength within the next 11 day to end bearish momentum in monthly timeframes. The histogram turning pink in the past was the signal that bulls had taken back control of crypto.
Where will September finish?
Is it possible for bulls to finally end the bearish momentum in their favor? Source: BTCUSD on TradingView.com | Source: BTCUSD on TradingView.com
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Featured image taken from iStockPhoto. Charts from TradingView.com