Using RealMotion Indicator to Identify a Bullish Divergence

February 10, 2022

Cryptocurrencies: Daily Update

By and Geoff Bysshe

To start today’s report, we will discuss two potential discretionary trading opportunities that we identified using our Crypto Sectors Radar in combination with our Real Motion indicator.

These are symbols that you can easily trade on any equities trading platform,

And since they are stocks that have exposure to crypto/blockchain and not actual cryptocurrencies, they give you exposure to the crypto space without having to trade the coins / currencies.

As you’ll read, the Crypto Sector Radar spotted how the opportunity I’m highlighting is updated at the end of the day, and below you can see what it looked like Wednesday morning.

What caught my eye was the green highlighted “BULL” readings for both BlockQuarry (ISWH) and Canaan (CAN), 2 stocks that are within the ‘Crypto Mining Companies’ sector.

When something is highlighted it means that it changed. In this case, the change to a bull reading is not as significant as the fact that it (Real Motion) is bullish when the price Phase is not. This was a reason to look at the chart.

Looking at the chart (above) you’ll see a bullish divergence pattern that often indicates a coming reversal.

In this case, the bullish divergence in ISWH is marked by the RM 10-day line remaining above the RM 50-day line even though the same moving averages in price are in the opposite condition (10-day under the 50-day). indicating that bullish momentum is building. In the case of a breakout, we can expect to see the 50-day moving average (price) and the $1.36 recent high serve as soft-resistance levels to beat.

When markets have divergence patterns like this, look for a breakout in the direction of Real Motion (bullish) to follow through. In this case, the breakout would be a move over the 50-day moving average and swing high resistance at $1.36.

We see the same 10/50 divergence pattern appear when looking at Canaan (CAN), plus an additional bullish divergence. The additional divergence occurred when the price hit a new low, while RealMotion did not reach a new low. When price rebounds from this situation it often marks the end/bottom of a downtrend.

With this bullish condition in place, one trading opportunity is to look for a breakout above the 50-day moving average to continue.

Utilizing the Sectors Radar is a great tool for identifying opportunities such as these at a glance.

Update: We have added the Valkyrie Bitcoin Miners ETF (WGMI) as a symbol within the ‘Blockchain ETFs’ section of our Crypto Sectors Radar.

Thus far the crypto/blockchain industry revival has been favorable to nearly anyone with investments in the space.

Today, Russia announced that they will treat Bitcoin (BTC) as a currency, allowing for Bitcoin and crypto-related operations to continue to not only exist, but also thrive with the sign-off of the Russian government.

We’ve also seen further US government engagement in the cryptocurrency realm this week, as it was revealed that the DOJ successfully recovered around 94,000 BTC from a 2016 hack on the Bitfinex cryptocurrency exchange. It is expected that the recovered BTC valued at over $3 billion will be returned to Bitfinex, which saw the price of the exchange’s UNUS SED LEO (LEO) token fly over +57% on Wednesday.

To learn about this whole Bitfinex hack and token recovery, you can read more here

Potentially the most significant news impacting crypto markets this week has actually not come from a government. Announcements from KPMG Canada and BlackRock both serve as major milestones for the institutional adoption of the cryptocurrency industry.

KPMG Canada announced that the firm has acquired an undisclosed amount of Bitcoin, but the significance is that this marks the first public announcement from a Big 4 accounting firm of their undoubted proclivity towards the booming crypto industry.

Meanwhile, BlackRock announced Thursday that they are planning on offering crypto trading to clients. That is the world’s biggest asset manager getting prepared to offer crypto trading services.

All of this just serves as further evidence that if you aren’t trading crypto now or considering investing soon, there is a good chance you will be left behind by not just your peers, but also the institutions you’ve known your whole life.

**If we discussed a cryptocurrency that you would like to trade but isn’t offered on your current crypto exchange, please see in order to view a profile on any tradable cryptocurrency, as well as a list of exchanges that do offer the coin for trading.**

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