The price of Bitcoin (BTC) rose to $ 9,065 on May 1 after hitting a high of $ 9,481 the previous day. Bitcoin price increase 35% in nine days it led to a sell signal very accurate call TD9 is triggered.
TD9, a sell signal that is part of the TD9 sequential system, It is activated when the price of an asset is nine days in a row above its price four days before the nine-day rally.
For example, the price of Bitcoin closed at $ 7,125 in the daily timeframe on April 19. From April 23 to May 1, BTC held a constant above $ 7,125 on nine consecutive days, which led to activation of TD9.
Bitcoin’s daily chart shows TD9. Source: trade view
Historical data show that The TD9 signal usually causes a short-term retracement of 12 to 20 percent at the Bitcoin price. The indicator detects overstretched movements both up and down and shows whether Bitcoin is oversold or overbought.
Traders expect Bitcoin to sell after halving, and TD9 coincides with timing
It is expected that Halving the reward dismantle through the block Bitcoin is scheduled to appear on May 12 and in previous halves the price of Bitcoin tended to rise before the event and shortly afterwards it had a “sell for the news” correction.
Traders already expect the halving of 2020 to have a similar effect to the halving of 2016 on the Bitcoin price.
Cryptocurrency investor and hedge fund manager Logan Han he said::
The BTC halving is right in front of us. In the previous halving, the price of Bitcoin declined and then recovered to an all-time high. If $ 9,450 was the top of this pump before halving, I expect Bitcoin’s price to take a step similar to the previous halving.
The Bitcoin price fell shortly after the second halving in 2016. Source: Logan Han
In the past two weeks, the price of Bitcoin has risen by 40% and has exceeded key levels such as the 200-day SMA and Fibonacci retracement levels of 0.618, which were calculated between USD 3,600 and USD 14,000.
When an asset crosses key levels in a short period of time, as Bitcoin’s price has done in a short period of time, it is often prone to a pronounced short-term downtrend.
Bearish signals indicate a correction
The argument for a sell-off after halving in the cryptocurrency market is now stronger due to three main factors. The recent vertical recovery of 40% without consolidation phases, the appearance of the TD9 indicator and the overbought state of BTC.
The Relative Strength Index (RSI) is constantly hovering around 75%, suggesting Bitcoin is overbought after its recent rally. Nevertheless, the technical analysts will continue to be divided over the development of Bitcoin in the coming weeks.
The dominance of spot volume versus futures confirmed the theory that the rally from USD 3,600 to USD 7,000 was mainly led by real retail demand, indicating that the rally was organic. However, the increase was from $ 7,000 to $ 9,400 mainly caused through the futures market, which could indicate that the upward trend is overstretched.
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