Bitcoin, the flagship cryptocurrency, has been enduring a bearish trend since late last year, one that saw its price drop from an all-time high of nearly $20,000 to a low of little under $6,000. A technical indicator now suggests the selloff may soon be over.
According to Bloomberg, the GTI VERA Convergence Divergence indicator is now showing signs the cryptocurrency’s trend may soon be reversed. This would see the bulls take over, and help the cryptocurrency surge. The last time the indicator showed a potential reversal, the cryptocurrency surged 39% in a month, the news outlet notes.
As Bloomberg put it, the indicator detects “trend reversal and exhaustion.”
It takes the traditional MACD, or moving average convergence divergence, that technical traders typically use, but eliminates noise by utilizing its proprietary VERA, or volatility explosion relatively adjusted, theory.
At press time, bitcoin is trading at about $6,400 after falling 3.7% in the last 24-hour period. The cryptocurrency fell over the US Securities and Exchange Commission’s (SEC) decision to reject various Bitcoin ETF proposals.
The SEC’s decision, as CryptoGlobe covered, was already expected by the market, so much so that interest in shorting bitcoin surged this month to a new all-time high. Taking this into account, as covered, Lawnmoer.io founder Alex Sunnarborg predicted a short squeeze would occur.
Yesterday the flagship cryptocurrency added $400 in about 20 minutes thanks to said short squeeze, which occurred right after crypto derivatives exchange BitMEX entered scheduled maintenance. Soon after, the cryptocurrency lost most of its gains.
This, analysts believe, after most traders started opening long positions expecting a bull rally would come from the short squeeze, and ended up getting their positions liquidated after BitMEX faced a distributed denial of service (DDoS) attack and BTC dropped.
Despite these short-term influences, most traders are still looking forward to the SEC’s decision on the VanEck-SolidX Bitcoin ETF on September 30. The regulator’s decision could help the crypto ecosystem enter another bull market, or keep on enduring the bearish trend.
BitMEX’s influence over the cryptocurrency ecosystem is notable, and isn’t good for the VanEck-SolidX Bitcoin ETF. The unregulated exchange trades over $3 billion worth of crypto per day, and has hit a record $8 billion in 24 hours.
The $BTC lightning +7% breakout during Bitmex's downtime shows why odds of SEC approving the CBOE bitcoin ETF proposal should be close to zero. Even if no manipulation (that's debatable) this stresses the importance of Bitmex, a fully unregulated market with 40% market share.
— Alex Krüger 🇦🇷 (@Crypto_Macro) August 22, 2018