Long-Term Indicator Suggests Bitcoin Price May Be Nearing Bottom

The indicator carved out a higher low in December, even though bitcoin's price slipped to $3,100, signaling waning bearish pressures 17 months before the mining reward halving.

Bitcoin witnessed a similar MACD divergence 17 months before the previous halving in July 2016.

The bullish MACD divergence indicates the cryptocurrency could be nearing a long-term bottom or may have carved out one near $3,100 in December.

Bitcoin could rise above $4,000 if the inverse head-and-shoulders neckline, currently at $3,735, is breached.

A long-term price indicator validates a growing consensus among investors that bitcoin is close to bottoming out.

That could change in the near future, as the bitcoin's moving average convergence divergence - a momentum indicator based upon price moving averages - is signaling waning bearish pressures.

The MACD usually moves in the direction of the price trend and indicates the strength of a move.

Bitcoin's weekly MACD has diverged from the primary bearish trend, i.e. the price hit a lower low near $3,100 in December, while the MACD carved out a higher low.

It is worth noting that a similar bullish divergence was charted over the five months leading up to January 2015, when BTC bottomed out near $150. So, there is a reason to believe the cryptocurrency is nearing, or has already reached, a major bottom.

Bitcoin image via Shutterstock; charts by Trading View.