Bitcoin price continues to consolidate in a narrow range as it failed to overcome a significant level of resistance to the upside a few days ago. However, from a technical analysis point of view, the time for a decisive breakthrough is near.
On the daily chart, the price is still consolidating with a large bearish wedge. These are commonly known as potential bullish reversal patterns in a bear market, provided they break to the upside.
However, last week’s rejection of the $18K resistance level and the 50-day moving average has halted the rally to the higher boundary of the pattern. As a result, it probably dropped to the $15K support level and the lower trendline of the wedge.
Given today’s bullish daily candle, a retest of the 50-day moving average, currently around the $17K mark, seems likely. The short-term future of the BTC price will be determined by the outcome of this experiment.
Looking at the 4-hour timeframe, it’s clear that price is recovering, but major issues are emerging, returning above $16,800 after last week’s decline.
A break above the $16,800 level would suggest a retest of the broken uptrend. On the other hand, a failure above $16,800 is likely to suggest a bearish continuation towards the key $15,000 area.
A recent short-term bullish move was signaled by the RSI indicator as a clear divergence formed between the last two price lows.
However, the oscillator is currently showing values around 50%, hinting at neutral momentum and giving little indication of the likely direction of the trend in the short term as the market continues to witness a fragile balance between buyers and sellers.
The following chart includes the Long Term Holder SOPR (Block formula) and the price of Bitcoin.
The long-term trailing profit ratio is the ratio of the trailing results (over 155 days) to the profit at the time the window opens. Values greater than “1” indicate that more long-term investors are selling at a profit, while values below “1” mean that more long-term investors are selling at a loss.
During the price recovery, the figure tripled, from $16,000 to approximately $18,400. It also made a significant jump after Bitcoin rallied to the crucial $18K resistance level.
This indicates that long-term holders see every price increase as an opportunity to unload their assets and take profits.
This is typical behavior in the late stages of a bear market. However, the next bull run will not begin until this group stops their asset allocation and starts accumulating BTC at higher rates.
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