Bitcoin Bull Market May End Early, Warns Key Indicator, But Flows Continue to Lean Bullish

This is a daily analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole. A key technical indicator is warning of an early end to the bitcoin (BTC) bull market, even as traders continue to position for a continued rally into the ￰0￱ indicator under consideration is the Relative Strength Index (RSI), a momentum oscillator that ranges from 0 to ￰1￱ helps traders gauge the speed and magnitude of recent price movements, typically calculated over a 14-day, 14-week, or 14-month period. BTC’s 14-month RSI is now flashing a bearish divergence, a pattern that occurs when the indicator begins to decline while prices continue to ￰2￱ occurrence of this divergence on the monthly chart indicates that BTC's bull market may be weakening and could potentially transition into a bearish ￰3￱ monthly chart shows that while BTC reached a new high in the July-August period, surpassing the December peak, the RSI moved in the opposite direction, forming a lower ￰4￱ bearish divergence gains added significance as it coincides with BTC encountering resistance at a key trendline drawn from the previous bull market peaks of December 2017 and November ￰5￱ cut to the chase, bulls should stay alert for potential bearish trend ￰6￱ said, the latest market flows suggest that traders are anticipating continued price gains.

"Blocks suggest traders are gearing up for further gains, with notable activity in December BTC call spreads ($125K/$160K). Ethereum's focus was on tighter topside, with $4,800 strikes active for September, and front-end pressure lifting," Jake Ostrovskis, OTC Trader at Wintermute, said in an email ￰7￱ flows are large transactions privately negotiated over the counter and outside of the public order ￰8￱ transactions typically involve institutions and high-net-worth ￰9￱ December call spread mentioned by Ostrovskis essentially bets on prices rallying to $160K and higher by the end of the ￰10￱ consensus is for a continued rally into the year-end and beyond, with prices reaching as high as $190,000.

As of writing, BTC changed hands near $110,500, representing a 4.6% loss for the month, according to CoinDesk ￰11￱ more: Bitcoin ‘Short Strangle’ Preferred as Market Signals Near-Term Calm: 10x Research