Looking at Bitcoin ( BTC ) on BitMEX (XBT), we some constructive signs on the four-hour chart. The sour price action may be creating a bullish divergence with a 9-period RSI . RSI or Relative strength index is making higher lows, and Bitcoin ( BTC ) is making lower lows during this consolidation. When a momentum indicator makes higher lows as price makes higher highs, that is a growing bullish divergence .
If Bitcoin ( BTC ) can hold and then price can turn up, the bullish divergence with the momentum indicators can add fuel any potential up move. So, having the market in the red today may be a good thing for people with higher risk tolerances that are looking to buy a dip.
Bottom Line: We have to admit it. Every time we see the whole market in the red, it creates a bit of 2018 flashback. We are pushing back against our fears. We are going to rely on the tactical charts to see if Bitcoin ( BTC ) can hold near 8700. If it does, a tactical rally could come soon.
DISCLOSURE: Token Metrics is a regular publication of information, analysis and commentary and does not provide individually tailored investment advice. The Token Metrics team has invested and advised in many blockchain companies. A complete list of the team disclosures, advisory roles and current holdings can be viewed here: https://blog.tokenmetrics.com/disclosures/.