The most recent outlook for Bitcoin is not overly promising, as the price has been rejected from a key technical resistance level and is breaking below support levels. The recent rebound from the $20K area appears to have been just another mid-bear market bull trap.
Technical Analysis
By: Edris
The Daily Chart
The price has been plummeting over the last few days after getting rejected from the $24K resistance level for the third time. The 100-day moving average, currently located at $24K, has also played a role in pushing the price down.
Currently, Bitcoin is trading below the 50-day moving average after impulsively breaking it to the downside and has failed to rise back above it. The next technical support would be the significant $20K level, and in case of a bearish breakout below it, another huge drop towards the $15K area could be expected.
The 4-Hour Chart
On the 4-hour timeframe, the price has been rejected from the higher boundary of the large bearish flag for the fourth time. A direct result is breaking below the bullish trendline, which has been holding the price over recent weeks. Currently, the lower boundary of the flag is acting as a support, but considering the price action, a breakout below it seems likely. This is a bearish flag pattern that tends to get broken to the downside after 3 or more top touches.
The RSI indicator has also just recovered from the oversold state, but it is still showing values below 50, indicating that the bears are in control. As a result, a bearish breakout and continuation towards the $18K low and beyond seems like the most probable scenario in the short term.
On-chain Analysis
By: Edris
Bitcoin Spent Output Value Bands
In recent weeks, large amounts of coins have been changing hands, as the Spent Output Value Bands metric demonstrates.
Amultitude of transactions larger than 10 BTC has been recorded on-chain recently. The selloff doesn’t appear to be slowing down. It looks like some large holders have finally lost conviction and are selling their coins as they fear more downside in the short term.
However, there are always two sides to any trade. It’s worth noting that the supply has been met with sufficient demand to hold the price above the $20K level. New wealthy investors are entering the market as they consider Bitcoin undervalued. This follows a correction of more than 60% from the $69K all-time highs.
Although this could be taken as a positive signal, the upcoming weeks should be monitored closely as supply could once again exceed the available demand. This would lead the price to break below the $20K support, which could lead to another rapid crash and capitulation.
The post Following 14% Correction in a Week, Is There More Pain Ahead for BTC? (Bitcoin Price Analysis) appeared first on CryptoPotato.
