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"Bitcoin has dropped to 20,000, is this the bottom?" "Bought at 30,000, now it's fallen to 25,000, should I sell?" People ask me questions like this every day. To be honest, hearing them gets a bit annoying—guessing the bottom is like betting on a coin flip, a 50/50 chance, but if you guess wrong, you could lose everything.
I make a living through technical analysis, so I never dare to blindly guess the bottom. I only focus on three technical signals. When all three appear simultaneously, the success rate of catching the bottom can exceed 85%. Today, I’ll share my "bottom judgment routine" with you, so you won't fall into the trap of "false bottoms" anymore, and you can confidently buy the dip.
**First Signal: Weekly MACD shows bullish divergence**
Many beginners just watch the daily MACD, but they end up being misled by short-term rebounds. The weekly level is the real key to identifying major bottoms. What is bullish divergence? Simply put: Bitcoin’s price makes a lower low, but the MACD histogram is rising, indicating that the downward momentum is weakening, and a rebound is imminent.
A crucial detail: it must be on the weekly chart, and there should be two consecutive weekly candles showing bullish divergence. Relying on just one is not reliable. For example, in March 2020, the weekly MACD showed bullish divergence for two consecutive weeks, and afterward, Bitcoin surged from $3,800 to $69,000, an 18-fold increase. Last November, I judged the bottom because the weekly MACD showed bullish divergence, and it indeed rebounded by 50%.
**Second Signal: RSI enters oversold zone, trading volume continues to shrink**
Everyone understands the RSI indicator, which ranges from 0 to 100. Below 30 is considered oversold. But just watching RSI enter oversold territory isn't enough; it’s easy to be fooled by repeated oscillations. The key is to look at trading volume—when RSI is in oversold territory and volume continues to decline, it indicates that the selling pressure is weakening, and the bottom signal becomes clear.