Bitcoin Technical Indicator Suggests Low Probability of ‘Santa Rally’

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Bitcoin may not be able to build on the relief rally as it heads into the year-end, a key technical indicator that’s flipped bearish amid heightened macro dangers signifies.

  • “The weekly MACD is on a ‘sell’ signal for the first time since April, increasing risk into year end,” Katie Stockton, founder and managing associate of Fairlead Strategies, mentioned in a weekly analysis word shared with CoinDesk on Monday. There is room for an additional sell-off to a degree the place the asset begins trying oversold within the intermediate-term, she wrote.
  • The MACD histogram is a technical indicator used to establish development reversals and development energy.
  • The indicator’s dip into unfavourable territory implies a bullish-to-bearish development change. Deeper bars beneath the zero line point out strengthening of bearish momentum.
  • The earlier bearish crossover confirmed in late April was adopted by consecutive weekly losses of greater than 10% that noticed costs drop to $30,000 from $58,000.
  • While bitcoin has bounced virtually 20% from Saturday’s low of beneath $43,000, the cryptocurrency has but to retake the bullish trendline from July lows breached final week.
  • According to Stockton, the bounce may very well be fleeting with upside prone to be capped round resistance at $55,000. Lingering Fed jitters, Omicron fears and China property market issues point out restricted upside within the short-term.