Hammer Time: The Bullish Signal That Could Save Bitcoin

Tony "The Bull" Severino

1 year ago

3 mins read

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Bitcoin price is still struggling to hold onto support at $30,000 on high timeframes after smashing through it more than a week ago now.

With buyers stepping in after the plunge, there is a chance for bulls to stop the downside with a bullish reversal candlestick setup. Learn more about the potential setup and find out if it’s “hammer time”.

A Bullish Hammer Could Put A Stop To The Bear Market

You wouldn’t necessarily know it by the ultra bearish sentiment or the recent plunge and resulting panic across the crypto market.

But if you look at medium timeframe price charts, Bitcoin bulls could be preparing out a stop to the bleeding and stage a bullish hammer reversal.

Japanese candlesticks are said to be developed by the so-called “God of Markets,” Honma Munehisa. Homna was a rice trader and wrote the first ever book in market psychology.

Candlesticks are comprised of a body and shadow, often called a wick. They are typically depicted as red and green, or white and black (open and closed). Each candle includes information on the open, close, low, and high of the trading session it represents.

How the candle opens, closes, and the highs and lows set during the session will shape the candle, and often provide information about what might be going on in the market — and what might come next.

Could this hammer put a stop to bears? | Source: BTCUSD on TradingView.com

The Technicals Supporting A Bitcoin Reversal Setup

On BTCUSD weekly and 2-week timeframe charts, the top cryptocurrency is working on a bullish hammer. A bullish hammer is a characterized as having a long lower wick acting as the handle, a small upper body, and little to no upper shadow.

Although the bullish signal only takes one candlestick to suggest a bottom is in, it is only confirmed with a strong follow through back to the upside.

There are plenty of technicals supporting a reversal | Source: BTCUSD on TradingView.com

Hammers are most effective when they follow a string of at least three down candles, and are supported by bullish technicals.

The bullish hammer is happening at what could be the end of a wave 4 expanding triangle correction, according to Elliott Wave Principle. The MACD is retesting the zero line, much as it did during the wave 1 Black Thursday correction. Each bottom, also coincidentally touched the lower Bollinger Band before reversing to the upside.

Will this bullish hammer confirm, and stop the bloodbath from continuing?

Here is a 🧵 on my full Elliott Wave analysis on #Bitcoin and why I don’t believe there is a bear market – and why I expect the last leg up any day now.

— Tony "The Bull" Severino, CMT (@tonythebullBTC) May 15, 2022

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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