Bitcoin TD Sequential Buy Signal: $113K Dip Opportunity

The Tom Demark (TD) Sequential indicator has generated a buy signal for Bitcoin on its 4-hour price chart, according to analyst Ali Martinez. This technical analysis tool is specifically designed to identify potential reversal points in an asset’s price trajectory. The signal emerged as Bitcoin slipped under the $113,000 level during the past day, retracing some of its recent recovery gains.

The TD Sequential operates through two distinct phases: setup and countdown. The current signal represents a completed setup phase, which involves counting candles of the same color up to nine. Martinez’s analysis shows that Bitcoin has just completed this setup with nine consecutive red candles, which traditionally indicates that the asset may have reached a local bottom and could be poised for a reversal. The indicator’s logic suggests that after such a consistent downward movement, the selling pressure may be exhausted.

The TD Sequential indicator’s setup phase requires nine consecutive candles in the same direction to generate a signal. In this case, the nine red candles indicate sustained selling pressure that may be reaching exhaustion. According to the indicator’s methodology, a buy signal occurs when the preceding candles were red, suggesting that the downward momentum may be losing steam and a reversal could be imminent.

Following the setup phase, the indicator moves into what’s known as the countdown phase. This second stage works similarly to the setup but counts thirteen candles instead of nine. Once these thirteen candles are complete, the price trend is considered to have reached another potential exhaustion point, possibly indicating another top or bottom. The current signal focuses specifically on the completed setup phase, which has historically been reliable for identifying short-term reversal opportunities.

Beyond the TD Sequential signal, Martinez has identified another potentially bullish development for Bitcoin. The analyst points to what appears to be an inverse head-and-shoulders pattern forming on Bitcoin’s 4-hour chart. This classic technical analysis pattern typically signals a bullish reversal when confirmed.

The inverse head-and-shoulders pattern forms when an asset’s price registers a low (the head) between two higher lows (the shoulders). According to Martinez’s chart analysis, Bitcoin has already formed the left shoulder and head portions of this pattern, with the right shoulder potentially developing during the recent price decline. If this pattern confirms with a successful right shoulder formation, it could signal significant bullish momentum ahead for the cryptocurrency.

Bitcoin’s current price action shows the cryptocurrency trading around $112,300, representing a decline of over 2.5% in the last 24 hours. This pullback comes after Bitcoin had shown signs of recovery, making the current dip particularly significant for traders watching for entry points. The convergence of technical signals at this price level adds weight to the potential reversal thesis.

The critical question for traders now is whether the TD Sequential buy signal will hold or if further decline is imminent. Technical indicators like the TD Sequential are not infallible, but they provide valuable frameworks for understanding market psychology and potential turning points. The additional confirmation from the potential inverse head-and-shoulders pattern adds another layer of technical evidence supporting the possibility of a bullish reversal from current levels.