Bitcoin (BTC) reached a three-day low at the weekly close on July 10, giving way to $21,000 as short-term support.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Trader looks for bullish divergences across markets
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD giving up some of its gains earlier in the week while still looking to cap its best weekly gain since March.
The pair was hovering around $20,850 at the time of writing, about $1,600 below the week high at the 200-week moving average.
Although the breakout did not last, Bitcoin gave some commentators reason to be cautiously optimistic ahead of the start of the new week.
“Markets are showing bullish divergence on the higher time frame and sentiment is the same at funeral,” Cointelegraph contributor Michael van de Poppe summed up.
There is a recipe for reversal, and it can accelerate very quickly. Invest when no one cares. Sell when everyone is interested.
Meanwhile, popular Crypto trader Tony contemplated the idea of entering a new sideways phase before a deeper drop occurred, something he imagined “would drive everyone crazy.”
Overall conditions remained uncertain, with the turmoil in Sri Lanka adding to the sense of nervousness caused by the common global theme of energy, food and financial crisis.
Attention focused on the US Dollar Index (DXY), which again ended the week with support after rising to new highs not seen in twenty years.
US Dollar Index (DXY) candlestick chart. Source: TradingView
Risk reserve is at an all-time low
Those who are after the opportunity to buy gold on BTC at the same time got a new major signal from the Reserve Risk Index.
RELATED: Bitcoin ‘Cheap’ at $20,000 As Bitcoin Price to Wallet Ratio Mimics 2013
As commentator Murad noted over the weekend, reserve risk, which shows long-term bearer sentiment, is at an all-time low at July prices.
“Either this indicator is down or we are in high time frame bottom territory,” he said in a piece of Twitter comments along with data from analytics firm Glassnode.
