Bitcoin fell to its lowest point on December 20th. Here is an important level to watch out for (BTC price analysis)

Bitcoin’s price has fallen almost vertically over the past few days, with multiple rejections from its 100-day and 50-day moving averages.

technical analysis

by: edris

daily chart

The $30,000 demand area, which was considered significant enough to reverse the downtrend and start an uptrend, also failed and moved lower.

Bitcoin is currently trading at around $28,000 and is massively oversold as indicated by the RSI indicator below 30%. Indeed, the RSI reached its last confirmed value during the May 2021 crash. The price could be bullish in the near term and retest the broken $30,000 level.

However, it is likely to continue falling towards the $24,000 and potentially $20,000 levels, which could finally mark a mid-term bottom. The 50-day and 100-day moving averages can also create bearish crosses, increasing the likelihood of a price decline in the near term.

Source: TradingView

4 hour chart

Over the course of 4 hours, the price has fallen below the large bearish flags formed over the past few months, confirming a bearish continuation scenario.

The $30,000 demand area provided support for the short term but failed shortly after signaling a bearish continuation as a symmetrical triangle pattern formed. The bearish trend is now showing signs of depletion, with the last two candles closing with a downtrend.

The RSI is also attempting to break through the oversold zone. This signal could be bullish in the near term to the broken $30,000 level. However, the bearish is fully under control and is likely to eventually break down to the $24,000 level.

Source: TradingView

Sentiment Analysis

by edris

Bitcoin open interest

Bitcoin’s price has plummeted rapidly over the past few weeks and has hit its bottom in 2021 ($28,000).

The futures market certainly played a major role in this massive decline as Bitcoin’s open interest was very high despite the price falling from $48,000 to $37,000 during April. The slow decline in open interest during the roughly 20% decline indicates that many of the long stop-loss and liquidation targets are below the $37,000, $33,000 and ultimately $28,000 support levels.

After the price fell below this level, many long positions were liquidated, creating a liquidation cascade, adding to selling pressure and leading to a stronger downtrend. However, open interest is still much higher than it was in May 2021 after crashing from $64,000 ATH, which shows that the futures market is still overheating after the recent downtrend.

This can be interpreted as a bearish signal as high open interest usually results in high volatility.

Source: Cryptoquant
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