Bitcoin: why a bear trap will boost the king coin

• BTC could exit its previously formed bear trap.
• A bullish divergence could form the basis for a near-term rally.

In the past seven days, the value of Bitcoin [BTC] was down 7.14% as it consolidated around the $26,700 region. However, the days of respite could be near, according to a tweet from Gert van Lagen.

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Sending away from the knees and toes

According to the technical analysis specialist, BTC had formed a “perfect” head and shoulders bottom below the 200-day Simple Moving Average (MA). This caused one bear trap bottom in preparation for a bullish crossover.

$BTC [1W] – Perfect head-and-shoulder butt formed under the weekly SMA200.

Successful double bullish retest of the neckline/SMA200

Perfect #bear trap/bottom W4 before it #blow off top/W5.#Bitcoin #BTC #Bull Market pic.twitter.com/ojzMqMcR8v

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

Used by traders to identify price reversals, a bearish head and shoulder has three peaks, with the middle rising higher than the others. In a case like this, BTC could reverse an uptrend.

But according to Lagen’s chart, the cartridge showed a bearish-to-bullish trend. This was because the center peak fell incredibly lower than the sides. This signaled a possible end to the downtrend.

Before his last observation, the analyst had pointed to a historical impulse, correction and blow-off trend. There he noted that it was BTC’s current situation.

On May 20, he told his 71,900 followers that Bitcoin could qualify for a large degree of bullish movement 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, extended plane
Wave 5 – Impulse, blow off

Target wave 5: 170-200k#Bitcoin #Bull Market pic.twitter.com/gegAi0GIvF

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

Attempts are already underway

Interestingly enough, Lagen wasn’t the only component to share an upbeat sentiment. On May 26 publication on CryptoQuant, Eralp Büyükaslan, BTC formed a bullish divergence similar to the November 2022 bearish top exit.

Source: CryptoQuant

The crypto investor and analyst also pointed to the negative exchange rate grid flow as another reason for a near-term bullish move. When there is a negative value of the indicator, it means that the outflow is an overwhelming inflow.

Thus, a possible outcome, if extended, can be a sign of accumulation. This, in turn, could turn bullish for the price of the asset.

Source: CryptoQuant

From a technical point of view, Bitcoin’s volatility appears to be declining. Recently, specifically on May 25, the price moved out of the zone where it touched the lower part of the Bollinger Bands (BB).

How many Worth 1,10,100 BTCs today?

This move means that BTC is the oversold zone, even though the price was not near the upper band. At the time of going to press, the Relative Strength Index (RSI) was 43.02 – up from 38.36 on May 24.

While the slight uptick represents a move from bearish momentum, BTC buyers may need to neutralize seller dominance to solidify the potential bullish trend.

Source: TradingView