A Bitcoin Chart That Offers Hope to Battered Crypto Bulls

• BTC's price action since late April contradicts the persistently bearish MACD signal.
• The divergence means potential for a sudden bull revival.

Talk about bearish factors in the crypto market, and there are plenty right now, ranging from U.S. economic slowdown, yen strength, political uncertainty, and dwindling blockchain activity.

However, bitcoin's (BTC) technical studies, particularly related to the weekly price chart, offer hope.

Technical analysis is often seen with skepticism, with critics likening it to "hocus pocus" due to its reliance on past data and indicators rather than fundamentals. However, how price behaves in relation to trend-tracking indicators can provide insights into the strength of ongoing price trajectory and potential momentum shifts.

In bitcoin's case, the weekly MACD histogram, gauging momentum using 12-week and 26-week exponential moving averages, has been negative since April, occasionally flashing the strongest bearish signal since 2022.

Bitcoin's price, however, has been locked in a slightly downward sloping channel between $50,000 and $70,000, forming a bull flag-like pattern, as opposed to a steep downtrend, contradicting the persistent MACD signal.

Thomas N. Bulkowski, one of the world's leading authorities on chart patterns, defines a bull flag as a period of consolidation characterized by a slight downward-sloping channel that follows a steep uptrend. The pause often refreshes higher, extending the preceding uptrend.

The combination of a persistently bearish MACD since late April and a flag-like price pattern hints at bullish vibes beneath the surface. In other words, sellers haven't been able to establish a strong downtrend, with losses persistently capped between $55,000 and $50,000 even during the panic-selling of early August.

The prolonged seller exhaustion means the potential for a sudden bull revival and price increases. Supporting that outlook are upward trending 50-, 100- and 200-week simple moving averages, indicating bullish momentum and the green Ichimoku cloud, a sign of long-term bullish bias.

That said, traders should keep an eye on the incoming macroeconomic data and trends in traditional markets.