Bitcoin price made a 5% move today, poking above $19,000 momentarily. It’s currently the biggest every day climb of 2023 and because the FTX collapse.
More significantly, the sharp rally tagged a level that triggered a possible trend change based on the weekly Parabolic SAR. Previously, the technical indicator has lived as much as its name. What could it mean this time?
Bitcoin Makes Biggest Move Of 2023
The beginning of 2023 has been positive for altcoins. But up until today, Bitcoin has been mild by comparison.
Following today’s CPI data release coming in at 6.5% and Biden’s victory lap on inflation, Bitcoin price soared by $1,000, taking the highest cryptocurrency above $19,000 briefly.
More importantly than what happened today, was what occurred on the weekly timeframe. BTCUSDT (Binance) weekly tagged the Parabolic SAR for the primary time since May 2022. The LUNA collapse pulled Bitcoin and other cryptocurrencies lower, starting the second, more aggressive phase of the recent downtrend.
The identical Parabolic SAR signal was also triggered prior to the 2019 crypto rally, and the 2020 to 2021 bull run (pictured below). Each rallies also blossomed from the identical exact trend line previously.
The Parabolic SAR has produced profitable results | BTCUSDT on TradingView.com
BTCUSDT Weekly Triggers Parabolic SAR Buy Signal
The Parabolic SAR is a technical indicator designed by J. Wells Wilder, Jr. and is used to detect changes in trend direction. The tool consists of a visible overlay of SAR dots that hover above or below price motion, determining the direction of the trend.
When the SAR dots are tagged, it suggests that a trend might “stop and reverse” — which is precisely what SAR stands for. Subsequently, it’s especially effective in timing entire and exits. Since the SAR dots travel higher or lower alongside the trend, they may be used reliably to set trailing stop losses.
On weekly timeframes, BTCUSDT (Binance) touched the Parabolic SAR, essentially telling short traders to get out of the position. If bears had used the PSAR for trailing stop losses, they’ve now been stopped out — purposely — in profit.
While the signal isn’t a guarantee of continued upside, considering that the possible signal of a trend change has appeared alongside the coincidental timing of a long-term trend line touch, the recovery from this level may very well be more sustainable than many are ready for.
Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive every day market insights and technical evaluation education. Please note: Content is educational and shouldn’t be considered investment advice. Featured image from iStockPhoto, Charts from TradingView.com