Bitcoin – Significant RSI and OBV bullish divergences
Hey everyone.
Please note that this is NOT financial advice.
So after the FED announced in November that they would begin tapering sooner than expected and might raise interest rates sooner as well, institutions and investors started de-risking, US stocks started dropping and Bitcoin corrected 38% from its all-time high of 69k to 42,8k. Bitcoin has then recovered some of its losses and entered an accumulation phase that has been lasting for the past two weeks.
As of late, Bitcoin has been highly correlated to the S&P 500. This is mainly due to the fact that it is treated as a high-risk asset. So if institutions and investors are de-risking because of the upcoming tighter monetary policies, this means stocks and Bitcoin will inevitably be dropping. But since markets and Bitcoin are forward-looking, de-risking had already begun when the FED made its announcement and is probably close to being completed.
Yesterday, JPMorgan quant guru Marko Kolanovic made a prediction that short sellers will get squeezed soon. He based his prediction on the fact that hedge funds are de-risking and shorting the market while liquidity is drying up and large short positions will likely need to be closed before January. This means that an end-of-year rally for stocks and Bitcoin could be around the corner.
To further support this macro bullish prediction, I have found on the Bitcoin daily chart 2 bullish divergences, one on the RSI and the other on OBV. As you will notice from the chart, during the past two accumulations (July and September), Bitcoin has printed OBV bullish divergences just before rallying. This time around, an RSI bullish divergence has also emerged, which creates a strong confluence between both indicators.
I know many of you may have turned bearish recently as the markets in general are painting a pretty gloom picture. But I believe that an epic end-of-year rally is still possible considering the macro conditions that seem favorable, the Bitcoin on-chain and futures data that is very bullish and the indicators that seem to point in the same bullish direction.
So for now, I say patience and hodl. Christmas is right around the corner.
Cheers.
Please note that this is NOT financial advice.
So after the FED announced in November that they would begin tapering sooner than expected and might raise interest rates sooner as well, institutions and investors started de-risking, US stocks started dropping and Bitcoin corrected 38% from its all-time high of 69k to 42,8k. Bitcoin has then recovered some of its losses and entered an accumulation phase that has been lasting for the past two weeks.
As of late, Bitcoin has been highly correlated to the S&P 500. This is mainly due to the fact that it is treated as a high-risk asset. So if institutions and investors are de-risking because of the upcoming tighter monetary policies, this means stocks and Bitcoin will inevitably be dropping. But since markets and Bitcoin are forward-looking, de-risking had already begun when the FED made its announcement and is probably close to being completed.
Yesterday, JPMorgan quant guru Marko Kolanovic made a prediction that short sellers will get squeezed soon. He based his prediction on the fact that hedge funds are de-risking and shorting the market while liquidity is drying up and large short positions will likely need to be closed before January. This means that an end-of-year rally for stocks and Bitcoin could be around the corner.
To further support this macro bullish prediction, I have found on the Bitcoin daily chart 2 bullish divergences, one on the RSI and the other on OBV. As you will notice from the chart, during the past two accumulations (July and September), Bitcoin has printed OBV bullish divergences just before rallying. This time around, an RSI bullish divergence has also emerged, which creates a strong confluence between both indicators.
I know many of you may have turned bearish recently as the markets in general are painting a pretty gloom picture. But I believe that an epic end-of-year rally is still possible considering the macro conditions that seem favorable, the Bitcoin on-chain and futures data that is very bullish and the indicators that seem to point in the same bullish direction.
So for now, I say patience and hodl. Christmas is right around the corner.
Cheers.
כתב ויתור
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