- The price of BTC has fallen below its level Supertrend indicator, which indicates a possible price drop.
- However, key momentum indicators point to a recovery imminent.
Bitcoins [BTC] The supertrend indicator recently signaled a sell, suggesting that the leading cryptocurrency could be heading for a more significant price correction as investors intensify coin distribution, according to a crypto analyst noted in a recent tweet.
Note the precision of the SuperTrend indicator that anticipates when to buy and sell #Bitcoin! It marked a sale recently, indicating a deeper price correction.
For a bullish reversal, $BTC should close above $29,500. If not, brace yourself for more losses. pic.twitter.com/TFQ3Djtiqj
— Ali (@ali_charts) August 27, 2023
How much is 1.10.100 BTC worth today?
The Supertrend indicator is a tool used to identify and track market trends. Although it is a lagging indicator that generates signals after the trend has already started, traders consider it a useful tool for trend confirmation and for determining the right time to enter and exit trading positions.
When the price of an asset is above the Supertrend line, the market is considered to be in an uptrend and is generally read as a buy signal. Conversely, when the price of an asset is below this indicator, a sell signal is generated, assuming that the market is in a downtrend.
An assessment of BTC’s price movements on a daily chart found that the coin’s price fell below the Supertrend line on August 17, after leveraged the derivatives market that drained more than $2.5 billion in market liquidity in a matter of hours .
Source: BTC/USDT on TradingView
Ali conducted a historical assessment of this indicator against BTC’s price reaction and found that it correctly signaled sell signals in June and November 2022 and buy signals in August 2022 and February 2023.
According to the analyst:
For a bullish reversal, BTC must close above USD 29,500. If not, brace yourself for more losses.
Don’t give up hope just yet
The severe bearishness of the current BTC market cycle cannot be overemphasized. The bear cycle was confirmed by the currency’s Moving Average Convergence/Divergence (MACD) indicator. This showed that the MACD line moved below the trendline after the August 17 capital exodus. The indicator has since positioned and has only yielded red histogram bars.
Also, the coin’s Aroon Up line (orange) has since moved down, yielding a value of 7.14% at press time. When the Aroon Up line is near zero, the uptrend is weak. And the most recent peak was reached long ago.
On the other hand, the Aroon Down line (blue) was seen in an upward trend of 57.14%. At this position, the price decline remained strong and the most recent low was reached relatively recently.
Source: BTC/USDT on TradingView
However, despite these worrying indicators, BTC’s main momentum indicators pointed to a possible price recovery.
Bitcoin’s Relative Strength Index and Money Flow Index were spotted in the oversold zones of 25.37 and 10.94, respectively. Upward price corrections are normally expected at this point, as sellers often find it difficult to initiate further price declines.
Source: BTC/USDT on TradingView
But for that to happen, market sentiment needs to improve
Source: Sentiment