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Trader Who Called May 2021 Collapse Updates Bitcoin Outlook, Says Bottom Likely In for BTC – Here’s Why

A trader who accurately called the beginning of the 2021 bear market meltdown says that the low for Bitcoin (BTC) is likely already in, based on historical patterns.

Pseudonymous analyst Dave the Wave tells his 190,000 followers on the social media platform X that Bitcoin’s monthly moving average convergence divergence (MACD) indicator has slightly contracted, which traditionally signals that a bullish trend has at least temporarily lost steam.

The MACD is a momentum indicator that traders use to spot potential points of trend reversals.

But Dave the Wave says he doesn’t think the signal suggests that BTC’s price is headed much lower, as the MACD has not ascended anywhere near the same levels as previous bull runs.

“Yes, there is a contraction on the BTC monthly histogram, with momentum slowing, but I don’t count this definitive for price going significantly lower given:

1] the MACD had not reached the height of the line

2] a maturing market

It wouldn’t at all surprise me to see something different develop, pattern-wise, over the longer time frame.”

Source: Dave the Wave/X

Looking at the trader’s chart, he seems to suggest that the monthly MACD of BTC has yet to come close to the diagonal resistance, indicating that the bull market is likely far from over.

On the weekly timeframe, the trader says that Bitcoin’s current MACD structure is reminiscent of July 2016, which was also right after the halving and just before a massive bull run.

“If I had to make a comparison of the current BTC weekly MACD to previous, I’d put it here.

Note that on the MACD cross highlighted, the price low was already in.”

Image

Source: Dave the Wave/X

At time of writing, Bitcoin is trading at $61,448.

Generated Image: DALLE3

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