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Breaking News: Fed Holds Interest Rates Steady, Bitcoin Awaits Trend Reversal Above $27,000
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Breaking News: Fed Holds Interest Rates Steady, Bitcoin Awaits Trend Reversal Above $27,000
bitcoin trend strength adx
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Bitcoin Trend Strength Suggests No End In Sight, Second Most Powerful Historically

Tony "The Bull" by Tony "The Bull"
3 years ago
in BTC
Reading Time: 3 mins read

Crypto enthusiasts expected Bitcoin to pick up momentum in 2020 thanks to the asset’s block reward halving mechanism. At best, investors anticipated a repeat of the 2017 rally, but the law of diminishing returns made such a scenario an unlikely reality.

But instead, the current uptrend is now the second most powerful in the cryptocurrency’s history. Here’s what a technical trend strength measuring tool says about where Bitcoin could go from here.

Perfect Storm Economic Environment Fuels Unstoppable Cryptocurrency Momentum

Bitcoin is well known and even feared for its bubble effect. The asset has a reputation for wild volatility, rising thousands of percent in a single rally, only to retrace 80% of the entire swing.

Getting in ahead of an epic run can result in life-changing wealth, as investors who bought the blood on Black Thursday have learned as the new year arrived and Bitcoin shot above $40,000.

Related Reading | TA: Bitcoin Price Sets New ATH, Why BTC Bulls Could Aim $40K

FOMO from both retail and institutions is driving this rally, keeping demand high. The halving slashed the supply, and what little is left is being scooped up by Grayscale to offer to its institutional clients at a premium.

There is also a perfect storm economic environment with near-endless fiat money printing for the cryptocurrency to thrive in.

The combined effect of all of these factors has resulted in an uptrend that is far stronger than anything 2017 had to offer. That year was the year that made Bitcoin a household name, rising from $1,000 to $20,000.

If this current rally is much stronger, what exactly might that suggest for the emerging asset?

 

bitcoin adx

The Average Directional Index could hint at far more upside for Bitcoin | Source: BTCUSD on TradingView.com

Bitcoin Trend Strength Second Most Powerful Historically: What This Means

According to the Average Direction Index, created by market technician J. Welles Wilder, Jr., the current uptrend on weekly timeframes is now the second most powerful in history.

The tool is used to gauge trend strength and give a read on when trends could be coming to an end. Bitcoin has reached a level that could signal the trend is nearing its conclusion but given all of the other factors and where the indicator says the cryptocurrency is compared to its 2013 cycle, more upside is possible.

Related Reading | On-Chain Data Shows Bitcoin Rally Has Yet to Enter “Overheated” Territory

The current ADX reading around 65, which according to the 2013 rally, pumped another 2,000% before any meaningful correction took place. That correction resulted in a 50% plummet, but ultimately the rally ended in late 2013 with an over 10,000% ROI from the current ADX reading to the peak.

Is this what investors should expect from Bitcoin in 2021?

Featured image from Deposit Photos, Charts from TradingView.com
Tags: bitcoinbtcbtcusdBTCUSDTcryptoxbtxbtusd
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Tony "The Bull"

Tony "The Bull"

Tony is the “always-on” Editorial Director and Head of Research at NewsBTC, leading a talented team of writers and editors across several different global time zones. Tony is also the founder of CoinChartist.io – an educational website focused on crypto trading. Partners include Elliott Wave International, TradingView, and more. Tony’s background includes an extensive, award-winning media production career and over fifteen years of publishing operations and management. In the past, Tony has founded several media websites and his content has been read billions of times. Past clients include the BBC, Fidelity, and many others. Tony "The Bull" is a level 3 CMT student (passed level 1 & 2), technical analyst, Bitcoin supporter, and avid speculator. He owns a python named Satoshi. Tony longs for the day when money is separated from the state. Tony is deeply fascinated by core market principles such as Elliott Wave Theory as they tie into mathematics like Fibonacci ratios. Market timing though DeMark indicators, Ichimoku, Gann tools, or Hurst Cycle Theory are also of key interest. Tony provides completely original content driven by exclusive, independent research. For more insights and education from Tony, check out his free TonyTradesBTC Telegram channel. Follow @TonyTheBullBTC on Twitter. You can also follow @CoinChartist_io on Twitter and subscribe on YouTube.

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