Bitcoin's 'hammer' suggests market bottom

Since the important falls of the session on May 19, the dominance of bitcoin, or what is the same, its specific weight compared to the rest of the 'cryptos' continues to increase without making much noise. In other words, the falls in the rest of the 'cryptos' are even greater than in bitcoin.

The 'hammer' is a candle that occurs quite frequently in the markets. It consists of a single candle, which typically occurs at the end of a prolonged corrective phase and often takes place near key supports. Interpreting this as a turning point of the trend, going from bearish to bullish. Or at least we would be anticipating the start of a significant short-term rebound. We are talking about a session in which the price falls sharply for much of the day and then recovers and closes near the highs, or becomes a high itself.

Hammers usually have long wicks or shadows in their lower part of at least twice the real body. It is of less significance whether the real body is green or red, although if it is green the strength implications may be greater. And if at the same time it coincides with the fact that some of the main oscillators at the moment (RSI, stochastic, etc.) show extreme oversold readings, all the better.

And this is what we have on the chart of the future of bitcoin. A 'hammer' that was left on Tuesday last week, after piercing the key support of $ 30,000 intraday to close at $ 32,885 after marking a session low at $ 28,800. Or what is the same, the support of $ 30,000 was only pierced on the intraday but the loss of it was not confirmed.

Translated by Caoimhe Toman