Bitcoin’s price is still trending down with strong momentum and is currently testing the 2017 all-time high range between $17K and $20K. However, the downtrend shows no signs of slowing down and is hard to call a bottom at this time.
The Daily Chart
The next few days could be critical for Bitcoin because a failure to find support at this level could cause the market to crash even deeper towards the $15K mark and beyond. On the other hand, if the price rebounds from the current area, the $24K level would be the first obstacle before the significant $30K resistance and the 50-day moving average.
These levels could still reject the price lower in case of a bearish pullback and cause the market to go through a potential consolidation period which could lead to a lengthy accumulation phase and formation of a bottom. The RSI is also showing that BTC is significantly oversold, pointing to a probable bounce or consolidation in the short term.
The 4-Hour Chart
On the 4-hour timeframe, it is evident that the price has been rejected twice from the $23K-$24K level after breaking it to the downside earlier in the month. A descending channel pattern is forming at the $17K-$20K support area. This is a bullish reversal pattern, and if the price rebounds from the third touch of the lower boundary and breaks the pattern to the upside, a short-term rally towards the $24K level and even the $30K supply zone could become probable.
Additionally, the RSI indicator displays a bullish divergence with the price, indicating the high probability of a bullish pullback. Conversely, a deeper crash towards the $15K level could be imminent if the price fails to complete the reversal pattern.
Bitcoin Exchange Inflow – Spent Output Age Bands
Bitcoin’s price crashed more than 30% during the last week, and the market is arguably experiencing maximum fear. Looking at the exchange inflows, a considerable amount of coins that have been bought and held over the last two years are being deposited into the exchanges.
This massive selling pressure indicates that many holders who have invested in the market over the last couple of years have reached their risk threshold and are selling their coins at a loss. This is causing the market to drop even lower, and there is still not enough demand, even at prices more than 70% below the all-time high. This lack of buyers could be a consequence of financial and geopolitical issues such as the war in Ukraine and rapidly rising inflation in the US and Europe. So, the short-term future is still looking dark for risk assets.
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Cryptocurrency charts by TradingView.
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