More

    Bitcoin Trend Strength Indicator Suggests Bull Run Isn’t Yet Over

    Bitcoin price is still stuck well below $35,000 but any attempt to push prices below $30,000 are bought up in minutes. Eventually, one side will have to break, and according to a trend indicator, it could be in favor of bulls.
    The tool, which measures the strength of a trend, suggests that the more dominant high timeframe bull trend isn’t anywhere close to finished, and it could lead to enormous upside if history repeats.
    Technical Analysis 101: How To Read The Average Directional Index
    The Average Directional Index isn’t as popular as some of the other tools created by J. Welles Wilder Jr. such as the Relative Strength Index, or Parabolic SAR – two indicators widely covered here recently.
    Each tool has a unique use, and the ADX is designed to measure the strength of a trending asset – for example, Bitcoin. The ADX is commonly featured with a Directional Movement Index included, made up of a DI+ and DI- indicator.
    Related Reading | Bull Signal From Bitcoin Bottom Is Best Hope Yet For Continuation
    The negative directional indicator and positive directional indicator tell analysts which side of the market controls the momentum – bears or bulls. Essentially, if the green line is above the red, bulls are in charge and vice versa.
    Reading the ADX itself is a bit different. The higher the reading, the stronger the trend is. A fall to below a reading of 20 indicates that there’s a distinct lack of a trend, or in other words – the trend has ended. Armed with this knowledge, here’s how it all applies to what’s going on with Bitcoin currently.

    The weekly bull trend isn’t over yet according to the ADX | Source: BTCUSD on TradingView.com
    What The ADX Says About The Bitcoin Bull Trend
    The chart above suggests that the weekly bull trend has never ended, even if bears have gained the upper hand for now. With the greater bull trend in tact, bulls still have a chance to prevent it from ending completely just yet. Past instances of the bull trend ending were more obvious and resulted in significant bearish downside.
    The leading cryptocurrency by market cap has already experienced a sharp selloff, but the selling has stopped at $30,000 for several weeks now.

    The daily bear trend might need to conclude before more upside | Source: BTCUSD on TradingView.com
    Switching to lower timeframes, the chart above shows that the short-term bear trend hasn’t finished yet, and the crypto market could spend another couple months trying to put in a bottom (green box). Note specifically how the previous top took several months to form (red box).
    Related Reading | Building The Case For A Potential Bitcoin False Bottom
    The ADX falling below 20 clearly marked the end of the short-term bull impulse, and a fall below 20 might be necessary for the bear trend to have concluded.

    On monthly timeframes, the secular bull run has never ended | Source: BTCUSD on TradingView.com
    Zooming out even further should give even the most shaken bulls more confidence. On monthly timeframes, bears never have even had a chance with the top cryptocurrency.
    The ADX says the strength of the trend hasn’t reached anywhere near the high point of the 2017 bull market, and might only be starting with the next recovery. From the low put in following the white box in 2016 resulted in another 3900% in continuation.
    Could that be what’s next for crypto?
    Featured image from iStockPhoto, Charts from TradingView.com

    Related articles

    Comments

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here

    Share article

    Latest articles

    Newsletter

    Subscribe to stay updated.

    bitcoin
    Bitcoin (BTC) $ 41,404.00
    ethereum
    Ethereum (ETH) $ 2,457.00
    tether
    Tether (USDT) $ 0.999312
    binance-coin
    Binance Coin (BNB) $ 330.29
    cardano
    Cardano (ADA) $ 1.30
    xrp
    XRP (XRP) $ 0.744415
    usd-coin
    USD Coin (USDC) $ 1.00
    dogecoin
    Dogecoin (DOGE) $ 0.207937
    polkadot
    Polkadot (DOT) $ 16.40
    binance-usd
    Binance USD (BUSD) $ 1.00
    uniswap
    Uniswap (UNI) $ 21.26
    bitcoin-cash
    Bitcoin Cash (BCH) $ 540.55
    litecoin
    Litecoin (LTC) $ 143.15
    chainlink
    Chainlink (LINK) $ 21.55
    solana
    Solana (SOL) $ 34.47
    wrapped-bitcoin
    Wrapped Bitcoin (WBTC) $ 41,349.00
    stellar
    Stellar (XLM) $ 0.286594
    matic-network
    Polygon (MATIC) $ 1.05
    ethereum-classic
    Ethereum Classic (ETC) $ 50.64
    theta-token
    Theta Network (THETA) $ 6.08
    internet-computer
    Internet Computer (ICP) $ 42.22
    vechain
    VeChain (VET) $ 0.087692
    dai
    Dai (DAI) $ 0.999851
    compound-usd-coin
    cUSDC (CUSDC) $ 0.022161
    okb
    OKB (OKB) $ 18.35
    filecoin
    Filecoin (FIL) $ 51.78
    cdai
    cDAI (CDAI) $ 0.021630
    tron
    TRON (TRX) $ 0.063692
    terra-luna
    Terra (LUNA) $ 10.78
    monero
    Monero (XMR) $ 236.02
    aave
    Aave (AAVE) $ 316.74
    eos
    EOS (EOS) $ 4.05
    compound-ether
    cETH (CETH) $ 49.08
    ftx-token
    FTX Token (FTT) $ 34.66
    amp-token
    Amp (AMP) $ 0.073889
    cosmos
    Cosmos (ATOM) $ 12.68
    neo
    NEO (NEO) $ 46.42
    crypto-com-chain
    Crypto.com Coin (CRO) $ 0.127748
    pancakeswap-token
    PancakeSwap (CAKE) $ 15.76
    shiba-inu
    Shiba Inu (SHIB) $ 0.000006
    the-graph
    The Graph (GRT) $ 0.616700
    leo-token
    LEO Token (LEO) $ 3.04
    algorand
    Algorand (ALGO) $ 0.837098
    bitcoin-sv
    Bitcoin SV (BSV) $ 139.66
    celsius-degree-token
    Celsius Network (CEL) $ 6.19
    klay-token
    Klaytn (KLAY) $ 1.04
    maker
    Maker (MKR) $ 2,880.74
    tezos
    Tezos (XTZ) $ 3.03
    iota
    IOTA (MIOTA) $ 0.876361
    axie-infinity
    Axie Infinity (AXS) $ 43.09