Divergence Alert: Did Bitcoin Just Hit a Bottom?
New Whales Emerge. Trump Doubles Down on His Pro-Crypto Approach
On March 20, President Trump notched another “first” in the history of cryptocurrency mainstream adoption by appearing at the Blockworks Digital Asset Summit. This is the first time an American President has participated in a crypto summit and shows how far crypto has come in the last decade.
To the disappointment of some, Trump did not make a live appearance but he spoke in a pre-recorded video. Well, it’s still the next best thing. The President’s main points were praising the recent shift to a pro-crypto approach, contrasting it with the previous administration, and reiterating that the U.S. will become the ‘crypto capital of the world’. He also spoke about dollar-backed stablecoins, saying: “With dollar-backed stablecoins, you will help expand the dominance of the US dollar for many, many years to come”.
Trump’s appearance, although bullish for Bitcoin as a whole, did not create volatility and did not send cryptocurrencies higher. However, there’s another piece of information that could mean that Bitcoin is ready to jump: new whales are stepping in and buying massive BTC amounts.
According to CryptoQuant, there’s a wave of new whales (wallets with over 1,000 BTC) that bought over 200,000 BTC over the last month. According to the research firm, these are new holders (wallets that were opened less than 6 months ago), so we are seeing increased appetite from new investors. Whale buying is usually followed by price rallies but accumulation may happen over a longer period (i.e. let’s not consider this a straight-up Buy signal).
Chart Analysis – BTC/USD
Bitcoin is currently changing hands at $83,850 and is trading below the bearish trend line, with lower lows and lower highs, aka a downtrend. However, there is one important thing to note on the daily chart: the RSI is showing a bullish divergence.
Comparing the RSI position relative to the last two lows, we can see that it has made a higher low, while the price has printed a lower low. More often than not, the bullish divergence results in a move up but as we’ve talked many times, the exact timing of the move is difficult to estimate. The price has already moved up after the divergence appeared and it remains to be seen if a stronger move will follow.
A daily close above $90,000 and/or the bearish trend line will bring in additional buyers, possibly igniting a stronger rally. Let’s not forget that the U.S. administration is pro-crypto, which is definitely an environment in which Bitcoin can grow, although maybe some investors are expecting more from President Trump.
