Bitcoin Forms Huge Bearish Wedge, Is $18K Retest Incoming? (BTC Price Analysis)

Bitcoin started to show potential bullish signs for a trend reversal as it was rejected at the $20K resistance.

BTC is currently in a critical zone. The price action over the next few days could decide the short-term and mid-term trends.

Technical Analysis

By Edris

The Daily Chart

Bitcoin price rebounded recently from $18K support and broke above the significant bearish trendsline that began to form in November when BTC reached the $69K all time high.

The 50-day moving average has rejected the price and the trendline mentioned previously is being retested, this time as support.

If the trendline is held, the 100-day moving mean – currently at $21K – could be the next dynamic resistance level. The $24K mark would be the main static.

As the market is still bearish daily, it is impossible to make any clear bullish predictions before the price breaks through the resistance levels.

The 4-Hour Chart

The price has not broken out of the tight horizontal range of $18K-20K on the 4-hour timeframe and has been rejected once more from the higher threshold. In this timeframe, a bearish wedge pattern is emerging (see the chart below). BTC is currently testing the lower boundary.

If the market crashes, it would aim for the $18K support level. It could break below that level and fall further. To invalidate the bearish wedge on the other side, the upper boundary must be broken to the upside. The $22,500 level is the next resistance in this (unlikely) scenario.

The RSI indicator has indicated a possible bearish reversal when the price was testing $20K resistance. However, it is currently hovering around 50 points which indicates that the momentum is in bear’s favor. This supports the bearish case.

Analyse of the On-chain

Bitcoin Spent Output Value Bands

Bitcoin is still in a downtrend and has yet to show signs of reversal. Market participants are left wondering where the bottom is. Below is a chart showing Bitcoin’s Market Cap (white), its 200-day moving mean (red), Realized Cap(green) and Delta Cap(blue).

The 200-day MA has historically been a reliable support area during bull markets and strong resistance during bear market. Bull market conditions are generally defined as areas that exceed the 200-day moving mean.

In the initial phase of bear markets, the Realized Cap was a reliable support. It tends to be broken to the downside in the final capitulation. When the market returns above that, a bull market (or mini-bull market) begins. Delta Cap marked the absolute bottom in the bear markets’ last two with great precision.

The realized cap is located at around $20K, which suggests that the market is in the final phase of the bear markets. The price could still fall and test the Delta Cap at $16K before hitting the ultimate price bottom.

This analysis does not take into account the market’s behavior during past cycles. It could be wrong this time. This chart gives a good overview from a macro perspective.

The post Bitcoin Forms a Huge Bearish Wedge, is $18K Retest Incoming (BTC Price Analysis), appeared first on CryptoPotato.

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Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the””  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

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