Bitcoin’s Bull Run Hits a Roadblock
The recent bull run of Bitcoin has come to a halt after more than a year of upward momentum. This pause in the rally is due to a “Super” sell signal acting as dynamic resistance, which could potentially lead to a reversal in BTC’s price.
Bitcoin Faces Downtrend Resistance
Despite the significant climb in Bitcoin’s price throughout 2023, sell signals are still present on higher timeframes such as the monthly chart. One such signal is found on the 1M SuperTrend, a trend-following technical indicator created by Olivier Seban. This indicator has generated only one sell signal on the 1M timeframe, and it remains intact despite BTCUSD reaching it this month.
Sell Signal Hinders New All-Time Highs
The SuperTrend marks a chart with a dynamic support and resistance line. When the price closes above or below this line, the sell signal changes to a buy or vice versa. Currently, downtrend resistance is at $44,621, slightly higher than December 2023’s close around $44,200. Although Bitcoin has attempted to break through this resistance, it continues to trade below it. A close above the SuperTrend line in January would be significant for crypto investors, but a breakout may occur later in February or March after consolidation below resistance.
Potential Mid-Cycle Correction
Looking at the bigger picture, passing through the SuperTrend on the 1M timeframe might not guarantee new all-time highs for Bitcoin. Historically, after a buy signal from the SuperTrend, Bitcoin experiences a mid-cycle correction that sets back its progress by months. However, it remains to be seen if this time will be different.
Hot Take: Bitcoin’s Bull Run Pauses as Sell Signal Looms
The impressive bull run of Bitcoin has encountered a significant obstacle as a powerful sell signal acts as resistance. This could potentially lead to a reversal in BTC’s price trajectory. Despite the climb, sell signals remain intact on higher timeframes such as the monthly chart. The SuperTrend indicator, which has only generated one sell signal on the 1M timeframe, continues to hinder Bitcoin’s progress. While a breakout above downtrend resistance would be a notable win for crypto investors, there is a possibility of a mid-cycle correction following the buy signal. The future remains uncertain for Bitcoin’s rally.
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