by Lydia Ludmila Today, June 30 marks the last day of the month, and after around 8PM ET the Bitcoin monthly candle will come to a close. This monthly candle isn’t anywhere as damaging as this past May, which historically was one of the worst on record.
However, there’s no denying that this month was also still fairly nasty and has left the market in a state of indecision. Here’s what past moments of indecision say about the current market cycle, and what could come next depending on which side of the trade gains control over the next month in Bitcoin.
Stalemate Between Bulls And Bears Results In Sideways Action
From the local top to the recent bottom, Bitcoin has collapse by nearly 60% and its only taken three months in full. Q2 2021 is now destined to be the bloodiest on record, with May nearly breaking records for the worst monthly drop ever.
Despite the violent drawdown, the cryptocurrency bull market still could very well still be on. The market knows this, so investors and traders are still cautiously buying the dip.
Price action is trapped between the Tenken-sen and Kijun-sen | Source: BTCUSD on TradingView.com
At the same time, panic sellers are being shaken out with each failed attempt to push lower. The sideways price action can be explained best due to price action – currency forming a red doji candle on the monthly – being sandwiched between the Tenken-sen and Kijun-sen.
The two span lines make up a small portion of the tools the Ichimoku indicator offers. The Relative Strength Index, pictured below, shows a bearish divergence across the most recent peak and the last bull market top.
Technical signals are a mixed bag but mostly lean bearish | Source: BTCUSD on TradingView.com
The miss of the higher, dotted trendline on the RSI could suggest another push higher is still possible, however, falling so deep out of the bull zone isn’t good for Bitcoin. At the same time, the Parabolic SAR has been tagged suggesting a major trend change, and the LMACD has begun to turn downward.
The LMACD hasn’t yet crossed bearish yet, and ahead of any cross happening bulls could push another wave higher. The histogram on the monthly MACD also hasn’t switched red just yet, which could prevent further downside if the green bars grow again.
Bitcoin And The Red Doji: What Could Come Following This Monthly Close
Interestingly, red doji candles, which indicate indecision between bulls and bears, have typically resulted in some of the largest bullish impulses in the months following.
Red doji often lead to reversals in cryptocurrency markets | Source: BTCUSD on TradingView.com
The red doji could suggest that bears are failing to continue to bring prices to lower support levels, and bulls might be able to regain the upper hand.
After such an enormous selloff market structure is typically damaged to the point of no return. Bulls best hope to hold out for is a repeat of the 2013 final wave up, which instead had a green doji to pin-point the exact bottom before a reversal to new highs.
Bulls best hope is for a repeat of something like 2013, but is hope enough? | Source: BTCUSD on TradingView.com
If Bitcoin can regain lost highs, another final leg up could bring the leading cryptocurrency by market cap to the final cycle high, and set another bull market peak.
The importance of this monthly close to the bull cycle continuing cannot be understated and is one that anyone in crypto should be paying. close attention to.
