Price charts for bitcoin and ether might be turning bullish after a month of market stagnation, potentially offering respite in the coming weeks, a new analysis shows.
- Bitcoin’s weekly stochastic oscillator has turned up from an oversold level or below 20, signaling the possibility of a near-term “relief rally,” according to Katie Stockton, founder and managing partner of Fairlead Strategies.
- Seasoned traders use the oscillator in conjunction with other indicators to gauge oversold and overbought conditions, which act as triggers for long and short trade entries. A reading below 20 implies oversold conditions, while an above-80 print indicates an overbought market.
- In bitcoin’s case, the weekly stochastic’s positive turnaround is accompanied by a buy signal on the daily and weekly chart DeMark Indicators, as noted by Stockton in a weekly research note. According to Investopedia, DeMark indicators compare the most recent maximum and minimum prices to the previous period’s equivalent price to measure the demand of the underlying asset.
- Thus, bitcoin appears poised for a more substantial relief rally – a price bounce due to seller exhaustion. The cryptocurrency is currently trading at 2.5-week highs above $40,000, representing an 8% gain on a 24-hour basis.
- According to Stockton, an initial resistance for bitcoin is near $47,000, which, if breached, would open the doors for further gains. However, Pankaj Balani, CEO of Delta Exchange, expects fresh sellers to step in above $45,000.
Ether, the native token of Ethereum’s blockchain, could also benefit from a shift in the price-chart indicators.
“The daily and weekly stochastics have turned up, supporting a near-term relief rally and test of initial resistance near $3,000,” Stockton said.
The second-largest cryptocurrency has faced multiple rejections in the range of $2,800-$3,000 since late May.
Source: Coindesk
