The TD9 sell indicator appeared on the S&P 500 chart over various time periods. Considering the higher level of correlation between Bitcoin and stocks, it could suggest a pullback in Bitcoin (BTC) prices in the short term.
But cryptocurrency traders are apparently unaffected by the vulnerability of the stocks. Several traders anticipate that Bitcoin will rebound in the mid-$ 9,000 despite TD9 signaling a correction.
What is the TD9 system and why might it indicate a BTC pullback?
A TD9 sell signal is an indicator part of the widely cited TD sequential system. Detects a possible change in trend by identifying overly extended corrections or manifestations.
A buy or sell TD9 signal appears when nine consecutive candles are higher than the previous four candles. As an example, suppose the Bitcoin price opened at $ 10,000 on a daily chart at the beginning of a month. If BTC closes above $ 10,000 over the next 13 days, a sell signal from TD9 would be confirmed.
Usually a 13-day rally with hardly any pullback leads to confirmation of a TD9 sell signal in many time frames. This week, a pseudonymous trader known as Fomocap said the signal emerged on the S&P 500 12-hour and 6-hour daily charts. The merchant said:
“TD9 signal confirmed in SPX: 1. D SPX 2. Multiframe: 24h, 12h, 6h”.
The TD9 sell signal appears on the S&P 500 chart. Source: Fomocap
Meanwhile, Skew data shows that the Bitcoin price has shown a relatively high level of correlation with stocks since March. As such, if the stock market falls in the short term, it could affect sentiment around Bitcoin.
However, the merchant emphasized that the accuracy of the TD9 signal is debated because it may give false signals. In a bull market, for example, the Bitcoin or US stock price can continually see bullish trends without further pullbacks. In that case, the sequential TD system could be less effective. The merchant said:
“It is one of many PA patterns. Yes, basically boost. TD9 also gives a lot of false signals. It is better to collect all the data, angles, views and then stuck in the imagination paradigm itself. Just to stay on the radar, not blindly follow. “
Cryptocurrency traders remain bullish on Bitcoin
At the same time, according to market analyst Michael van de Poppe, Bitcoin’s uptrend remains intact due to resistance in a solid support area.
Bitcoin has been holding above $ 9,200 for most of the past two months. BTC saw brief declines below $ 9,000, but the top cryptocurrency recovered quickly.
Bitcoin price chart with upward potential fractal. Source: Crypto Michael
If BTC continues to defend the $ 9,200 level and explodes above $ 9,300, van de Poppe noted that a recovery above $ 9,600 is likely to occur. He said:
“So far so good. Support, there was no massive shock. If we break $ 9,300, I think $ 9,600 is a likely short-term target.”
Bitcoin trader Zoran Kole also suggested that the chances of Bitcoin’s uptrend continuing into the mid-$ 9,000 remain high.
