Bitcoin Trend Strength Indicator Suggests Bull Run Isn’t Yet Over

Bitcoin price is still stuck well below $35,000 but any attempt to push prices below $30,000 are bought up in minutes. Eventually, one side will have to break, and according to a trend indicator, it could be in favor of bulls.

The tool, which measures the strength of a trend, suggests that the more dominant high timeframe bull trend isn’t anywhere close to finished, and it could lead to enormous upside if history repeats.

Technical Analysis 101: How To Read The Average Directional Index

The Average Directional Index isn’t as popular as some of the other tools created by J. Welles Wilder Jr. such as the Relative Strength Index, or Parabolic SAR – two indicators widely covered here recently.

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Each tool has a unique use, and the ADX is designed to measure the strength of a trending asset – for example, Bitcoin. The ADX is commonly featured with a Directional Movement Index included, made up of a DI+ and DI- indicator.

Related Reading | Bull Signal From Bitcoin Bottom Is Best Hope Yet For Continuation

The negative directional indicator and positive directional indicator tell analysts which side of the market controls the momentum – bears or bulls. Essentially, if the green line is above the red, bulls are in charge and vice versa.

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Reading the ADX itself is a bit different. The higher the reading, the stronger the trend is. A fall to below a reading of 20 indicates that there’s a distinct lack of a trend, or in other words – the trend has ended. Armed with this knowledge, here’s how it all applies to what’s going on with Bitcoin currently.

bitcoin bull trend

bitcoin bull trend

The weekly bull trend isn't over yet according to the ADX | Source: BTCUSD on

What The ADX Says About The Bitcoin Bull Trend

The chart above suggests that the weekly bull trend has never ended, even if bears have gained the upper hand for now. With the greater bull trend in tact, bulls still have a chance to prevent it from ending completely just yet. Past instances of the bull trend ending were more obvious and resulted in significant bearish downside.

The leading cryptocurrency by market cap has already experienced a sharp selloff, but the selling has stopped at $30,000 for several weeks now.

bitcoin bull trend daily

bitcoin bull trend daily

The daily bear trend might need to conclude before more upside | Source: BTCUSD on

Switching to lower timeframes, the chart above shows that the short-term bear trend hasn’t finished yet, and the crypto market could spend another couple months trying to put in a bottom (green box). Note specifically how the previous top took several months to form (red box).

Related Reading | Building The Case For A Potential Bitcoin False Bottom

The ADX falling below 20 clearly marked the end of the short-term bull impulse, and a fall below 20 might be necessary for the bear trend to have concluded.

bitcoin bull trend monthly

bitcoin bull trend monthly

On monthly timeframes, the secular bull run has never ended | Source: BTCUSD on

Zooming out even further should give even the most shaken bulls more confidence. On monthly timeframes, bears never have even had a chance with the top cryptocurrency.

The ADX says the strength of the trend hasn’t reached anywhere near the high point of the 2017 bull market, and might only be starting with the next recovery. From the low put in following the white box in 2016 resulted in another 3900% in continuation.

Could that be what’s next for crypto?

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Bear Trend Begins To Take Hold In Bitcoin For First Time Since October 2020

Bitcoin price has now pulled back a full $13,000 from 2021 high to low. Yesterday’s massive bearish, red candle is one obvious sign that the trend is turning. However, a technical analysis tool used to gauge the strength of trends also confirms that bears have taken over the reigns from bulls and it could lead to a short-term downtrend.

Bitcoin Bears Regain The Upper Hand, Reclaim Crypto For First Time Since October

Bitcoin is undeniably in an uptrend, and according to comparisons with past market cycles, things are only just getting warmed up.

But that doesn’t mean that the higher timeframe trend can’t be up, while the shorter-timeframe intraday trends heads down – or that price action across days and weeks can’t temporarily turn bearish.

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Related Reading | Career Trader Subtly Hints Of Bitcoin Parabola Breakdown With Fractal Diagram

That’s exactly what has happened recently, with the top cryptocurrency shaving as much as $13,000 off its price from high to low. Yesterday’s daily close left behind an extremely bearish candle and reminder that asset prices don’t only move up in a straight line.

The recent parabola might have been broken, which could suggest a sharper correction is coming. Some of the best traders and analysts are expecting more downside before things turn back up.

bitcoin bear trend daily adx

bitcoin bear trend daily adx

The Average Directional Index and DMI show bears have taken over daily timeframes | Source: BTCUSD on

The Average Directional Index confirms the bearish price action. The red DMI moving so sharply above the green is a clear sign that bears are now in control of the cryptocurrency’s daily trend once again.

The ADX itself is still well below 20, so the trend hasn’t yet fully taken hold. What’s notable is that this is the first time bears have reclaimed Bitcoin since October when FOMO spun out of control.

Trend Strength Measuring Tool Shows Bulls Aren’t Down For The Count Just Yet

The ADX is used to gauge the strength of the underlying trend, and like most tools, higher timeframes provide the most dominant signals.

Bears have won on the daily, but on weekly timeframes, however, the same tool shows that bears don’t really have a chance, and any downward momentum will be short-lived before bulls regain control.

bitcoin bear trend weekly adx

bitcoin bear trend weekly adx

The Average Directional Index and DMI show bears have taken over daily timeframes | Source: BTCUSD on

Oftentimes, corrections in assets are healthy, confirm resistance as support, and reignite buying interest by reaching more attractive price levels.

Related Reading | The Striking Similarities Between The 2017 Bitcoin Peak And Now

Could the pullback be exactly what Bitcoin needs to refuel and rocket higher? Or are there simply too many similarities shared with the 2017 peak to ignore the potential of a longer downtrend in the weeks ahead?

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Technicals Point To Extended Ethereum Dominance Over Bitcoin

Although institutional interest has undeniably been focused on Bitcoin, Ethereum’s lower cost of entry and unstoppable momentum, have allowed the altcoin to outperform the top crypto asset by market cap recently.

A near flawless technical pattern yet to break out coinciding with a trend strength measuring tool approaching pivotal levels, suggests Ethereum’s dominance over BTC not only will continue for the time being, but the intensity will soon increase substantially.

Ethereum Breaks All-Time High, Restores Hype In Altcoins

Ethereum this week finally surpassed its former all-time high of $1,400 set back in January 2018. Bitcoin’s waning momentum has turned capital flows toward the second-ranked cryptocurrency and top altcoin ever since.

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Related Reading | Ethereum Open Interest Reaches All-Time High Alongside Record Breaking Rally

Dmytro Volkov, CTO of CEX.IO says that although Bitcoin trading volume has “doubled” recently on renewed “hype,” Ethereum trading turnover on the platform has increased three-fold during the same timeframe. The ETHUSD trading pair specifically soared to over five times the average trading volume, accounting for as much as “20%” of the platform’s total volume.

Top industry analysts expect Ethereum price to follow the trading volume and double now that the record has been smashed, much liked Bitcoin did. But that’s not the only pattern that the altcoin could soon repeat.

ethreum bitcoin tradingviewEthereum could soon repeat Bitcoin's breakout | Source: ETHBTC on

ETHBTC Forms Near Flawless Technical Pattern On The Verge Of Powerful Breakout

The chart pictured above shows the symmetrical triangle pattern formed over the last several years between the altcoin and top cryptocurrency.

After the first year of price action, the trend has mostly favored Bitcoin. But that is all about to change. Much like Bitcoin’s enormous breakout against the dollar once it smashed through the top trendline of the triangle, Ethereum is ready to do the same against BTC.

And given the momentum that Bitcoin has on its own, the rally in Ethereum is poised to be something for the history books.

ethreum bitcoin tradingview adx

ethreum bitcoin tradingview adx

Momentum is building up pressure below resistance for a strong breakout | Source: ETHBTC on

A breakout appears imminent, backed by building bullish buying pressure and an almost nonexistence presence of sellers, according to the Average Directional Index and the Directional Movement Index. These tools combined show when buyers or sellers are in control, and how powerful the strength of the trend is.

Currently the red line on the DMI has sunk far below the green line. The bullish crossover points to more upside ahead, while the ADX itself growing to above 20 suggests the trend is only starting.

Related Reading | Capital Manager: Ethereum Will Double In Two Weeks Once ATH Is Broken

A coinciding inverse head and shoulders and rounding bottom formation has built a base at which Ethereum will launch against Bitcoin from.

Unless there’s a sudden and sharp reversal across the board, the top altcoin will give Bitcoin a run for its crypto market dominance in the months to come.

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Bitcoin (BTC) $ 42,176.30 5.63%
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