“Guppy indicator” that suggested Bitcoin will rise in 2023, is it a bearish signal? | CoinDesk JAPAN

The technical analysis indicator that triggered Bitcoin (BTC)’s multi-week 70% surge is about to flash a bearish signal. This indicator turned bullish in mid-October.

The Guppy Multiple Moving Average indicator, developed by Australian trader Daryl Guppy, separates multiple exponential moving averages (EMAs) into two categories: short-term and long-term. This helps traders read trend changes and trade on trending markets by comparing them. The short-term bands, shown as green lines, consist of 3-day, 5-day, 8-day, 10-day, 12-day, and 15-day EMAs, and the long-term bands, shown as red lines, consist of 30-day, 35-day, and 40-day EMAs. , consists of 45-day, 50-day, and 60-day EMAs.

A bearish to bullish trend change occurs when the green band moves above the red band. A bearish-to-bullish trend change occurs when the green band moves below the red band. Many traders tend to be trend followers, preferring to enter when a crossover appears and hold in the direction of the long-term trend.

At the time of writing, GMMA was showing a bearish crossover, with the green band on the verge of breaking below the red band. In other words, it shows that bearish momentum is increasing.

The Guppy indicator is on the verge of flashing a bearish signal. (TradingView/CoinDesk)

At the time of writing, Bitcoin was trading around $39,200 on major exchanges, well below the red band.

In mid-October, when Bitcoin was trading near $28,000, the green band rose above the red band, indicating a bullish trend ahead. Bitcoin rose consistently over the next few weeks, staying consistently above the red band and hitting a high of around $49,000 on January 11th.

The mid-January and mid-March 2023 bull crosses led to a multi-week bullish trend. Similarly, the December 2021 and April 2020 bear crosses ended up causing lingering pain in the market.

｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: TradingView/CoinDesk
｜Original text: Bitcoin Indicator, Which Signaled Late 2023 Rally, Is About to Flash Bearish Signal