After smashing it, Bitcoin prices are still struggling to maintain support at $30,000 for high-timeframes.
Bulls have the opportunity to end the downside by setting up a bullish candlestick setup, with buyers coming in after the plunge. Learn more about the potential setup and find out if it’s “hammer time”.
Bullish Hammer could put an end to the bear market
You wouldn’t necessarily know it by the ultra bearish sentiment or the recent plunge and resulting panic across the crypto market.
If you take a look at the medium-term price charts of Bitcoin, it is possible that Bitcoin bulls are attempting to stop the bleeding by staging a bullish hammer reverse.
This Expanding Triangle Pattern Could Be The Last Hope For Bitcoin Bulls| This Expanding Triangle Pattern Could Be The Last Hope For Bitcoin Bulls
Japanese candlesticks are said to be developed by the so-called “God of Markets,” Honma Munehisa. Homna, a rice trader, wrote the first book on market psychology.
A candlestick is made up of two parts: a shadow and a body. This is often called the wick. These candles are usually depicted in red, green or black (open/closed). Every candle contains information about the trade session that it represents, including the low, high, open and close times.
How the candle opens, closes, and the highs and lows set during the session will shape the candle, and often provide information about what might be going on in the market — and what might come next.
This hammer could put an end to the bears. Source: BTCUSD on TradingView.com | Source: BTCUSD on TradingView.com
These Technical Supports A Bitcoin Reversal Setup
BTCUSD’s weekly and biweekly charts show the most popular cryptocurrency working on a bullish-hammer. The bullish hammer has a longer lower wick that acts as the handle and a smaller upper body. There is little shadow.
It only takes one candlestick before the bullish signal to confirm that a bottom has been reached. However, the confirmation is made only by strong follow-through to the upside.
Source: BTCUSD on TradingView.com| Source: BTCUSD on TradingView.com
The most powerful hammers are those that follow at least three down candles and are supported with bullish technicals.
According to Elliott Wave Principle, the bullish hammer could signal that wave 4 is over. Like the wave 1 Black Thursday correction when it retested the zero line during its run, so the MACD will be retesting that zero line. Before reversing back to the upside, each bottom also touched the lower Bollinger Band.
Read Related Reading| Bitcoin Bear Market Comparison Says It Is Almost Time For Bull Season
This bullish hammer will confirm the death and prevent more bloodshed.
Here is a 🧵 on my full Elliott Wave analysis on #Bitcoin and why I don’t believe there is a bear market – and why I expect the last leg up any day now.
— Tony “The Bull” Spilotro (@tonyspilotroBTC) May 15, 2022
Follow @TonySpilotroBTC on Twitter or join Telegram from TonyTradesBTCGet daily market insight and expert technical analysis education. Please note: Content is educational and should not be considered investment advice.
Featured image taken from iStockPhoto. Charts are from TradingView.com