CMT-Certified Analyst Shares Insights on the Right Time to Purchase Bitcoin as Heikin Ashi Candles Signal a Bearish Trend
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In light of the recent surge in Bitcoin (BTC) prices surpassing $94,000, analysis from Tony Severino, a certified market technician, has shed light on a methodical approach for navigating upcoming market movements. As the Heikin Ashi monthly candle indicates bearish signals, he shares insights on the optimal timing for Bitcoin purchases, cautioning against potential bear market pitfalls.
Upper Bollinger Band Indicates Bitcoin Buying Opportunity
Severino has conducted a comprehensive analysis of the Bitcoin landscape, pinpointing specific conditions that could encourage investors and traders, himself included, to consider re-entering based on critical market indicators and price movements. The analyst provided insights into a Bitcoin price chart featuring monthly candlesticks, Bollinger Bands, and historical comparisons.
Related Insights
The chart reveals that in late 2021, after reaching its previous all-time high, Bitcoin tested the Upper Bollinger Band but did not manage to close above it. This situation was interpreted as a classic signal of non-confirmation, ultimately leading to a sharp downturn and severe bear market in 2022.
Fast forward to the present, Bitcoin is trading above $94,000, while the Upper Bollinger Band sits at $108,000. Severino emphasizes that merely reaching this Upper Bollinger Band level, akin to the situation in 2021, does not constitute sufficient grounds for purchasing Bitcoin in anticipation of price gains. Instead, he argues for a complete monthly close surpassing $108,000 to validate a breakout and the continuation of the bullish trend.
The analyst also indicated that he would contemplate purchasing Bitcoin once it maintains a close above this threshold. However, should the leading cryptocurrency fail to sustain a monthly close above the Upper Bollinger Band, it might replicate the 2021 double top and deceptive breakout, potentially ushering in another drastic bear market within this cycle.
In summary, Severino urges investors to keenly monitor Bitcoin’s price movements in relation to this vital Bollinger Band level. He underscores that safeguarding capital is far more important than yielding to the Fear Of Missing Out (FOMO). Given the heightened risks and increased volatility, the analyst contends that definitive confirmation signals are essential for safe market engagement.
BTC’s Heikin Ashi Candle Signals Bearish Trend
While Severino identifies the ideal moments to invest in BTC, he also stated that the Heikin Ashi candles for Bitcoin have shifted to a bearish posture. The analyst presented a 12-week Heikin Ashi candlestick chart, illustrating early warning signs of a possible bear market.
Related Insights
The chart marks an essential juncture where Bitcoin’s Heikin Ashi candle turned red for the first instance since its past price peaks in 2014, 2018, and 2022. Traditionally, such a sign has signified the initiation of extended bear markets and significant price corrections.
Further reinforcing the bearish perspective, Severino noted that the Fisher Transform, a technical measure utilized for identifying trend reversals, shows a bearish crossover, with the green Fisher line dipping below the red Trigger line. In previous cycles, whenever these two indicators—the Heikin Ashi and Fisher Transform—have aligned, Bitcoin has faced substantial declines lasting for months or even years.
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