Bitcoin: Why a bear trap will boost the king coin

• BTC may very well be leaving its previously shaped bear lure.
• A bullish divergence may lay grounds for a short-term rally.

Within the final seven days, the worth of Bitcoin [BTC] decreased by 7.14% whereas consolidating across the $26,700 area. Nonetheless, the times of respite may very well be close to, based mostly on a tweet put out by Gert van Lagen.

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Steering away from the knees and toes

In accordance with the technical evaluation specialist, BTC had shaped a “excellent” head and shoulder backside beneath the 200-day Easy Shifting Common (MA). This brought about a bear lure backside in preparation for a bullish crossover.

$BTC [1W] – Excellent Head-and-Shoulders backside shaped beneath the weekly SMA200.

Profitable double bullish retest of the neckline/SMA200

Excellent #beartrap/backside W4 earlier than #blowoff high/W5.#Bitcoin #BTC #BullMarket pic.twitter.com/ojzMqMcR8v

— Gert van Lagen (@GertvanLagen) May 26, 2023

Utilized by merchants to determine worth reversals, a bearish head and shoulder has three peaks, with the center one rising larger than the others. In an occasion like this, BTC may reverse an upward pattern.

However in accordance with Lagen’s chart, the sample depicted a bearish-to-bullish pattern. This was as a result of the center peak dropped extremely decrease than the perimeters. This signaled a doable finish to the downward pattern. 

Earlier than his newest remark, the analyst had identified a historic impulse, correction, and blowoff pattern. There, he famous that it was BTC’s present scenario. 

On 20 Might, he informed his 71,900 followers that Bitcoin may very well be in line for a big diploma of bullish motion, as described by the Elliotwave impulse.

$BTC [1W] – Elliottwave impulse 2019-2023

Wave 1 – Impulse
Wave 2 – Correction, Sharp Zigzag
Wave 3 – Impulse , momentum
Wave 4 – Correction, Expanded Flat
Wave 5 – Impulse, Blow-off

Goal Wave 5: 170-200k#Bitcoin #BullMarket pic.twitter.com/gegAi0GIvF

— Gert van Lagen (@GertvanLagen) May 20, 2023

Makes an attempt are already on the way in which

Curiously, Lagen was not the one half who shared a bullish sentiment. In a 26 Might publication on CryptoQuant, Eralp Büyükaslan, BTC was forming a bullish divergence just like the bearish high exit of November 2022.

Supply: CryptoQuant

The crypto investor and analyst additionally identified the damaging change netflow as one more reason for a short-term bullish transfer. When there’s a damaging worth of the indicator, it implies that outflows are overwhelming inflows. 

Thus, a doable final result, when extended, may very well be an indication of accumulation. This, in flip, may develop into bullish for the worth of the asset.

Supply: CryptoQuant

From a technical standpoint, Bitcoin’s volatility appears to be contracting. Not too long ago, significantly on 25 Might, the worth left the zone the place it touched the decrease a part of the Bollinger Bands (BB). 

How a lot are 1,10,100 BTCs value in the present day?

This transfer implies that BTC had exited the oversold zone, at the same time as the worth was not close to the higher band. At press time, the Relative Energy Index (RSI) was 43.02 — a rise from 38.36 on 24 Might.

Although the slight uptick represents a transfer from the bearish momentum, BTC consumers would possibly have to neutralize the dominance of sellers to solidify the potential bullish pattern. 

Supply: TradingView