Bitcoin: Working out realistic chances of BTC holding its immediate support


With the bears capping the buying rallies at the $21.6K-mark for over two weeks now, Bitcoin [BTC] steeply slumped in the last five days. The near-term trajectory revealed a bearish edge. Thus, the king coin has been slogging to close above the basis line (green) of its Bollinger Bands(BB).  

Given the current setup approaching the month-long trendline resistance (white, dashed), BTC could continue its ongoing bearish trend. At press time, BTC was trading at $19,129.16.

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BTC 4-hour Chart

Source: TradingView, BTC/USDT

The broader bearish leverage saw an uptick after the bulls failed to uphold the $28K support. The consequent decline has kept the coin under its month-long trendline resistance.

The largest crypto lost nearly 41.7% (from 10-19 June) after plunging below the $28K zone. Thus, BTC gravitated toward its 18-month low on 19 June. Since then, buyers could not inflict a trend-altering rally while the sellers took control of the near-long-term trend.

The shooting star candlestick pattern has further reaffirmed the bearish strength by revealing a strong rejection of higher prices. Also, the recent movements have chalked out a bearish pennant-like structure in the four-hour timeframe.

A sustained break below the pattern could expose BTC to a drop toward the lower band of BB. In this case, potential targets could rest at the $18.5K-$18.7K range before any buying comeback chances.

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On the flip side, an immediate revival could slam into the trendline resistance or the 20 EMA before falling back into its bearish track.

Rationale

Source: TradingView, BTC/USDT

The Relative Strength Index’s (RSI) position below the midline has resonated with the bearish narrative for the last five days. A revival from the 36-mark could help buyers delay the bearish moves. However, the extent of this revival will depend on the readiness of bulls to ramp up the buying volumes.

With the Accumulation/Distribution line marking a steep plunge, sellers exhibited strong control. But an immediate revival from its current plateau could aid the buyers to hold the $19K zone on the charts.

However, the ADX displayed a substantially weak directional trend for BTC. 

Conclusion

In light of the bearish pennant approaching the month-long trendline resistance, BTC could see a near-term setback on the charts. A confirmed break below the pattern would reaffirm the targets mentioned above.

Further, investors/traders should factor in the macro-economical factors affecting the broader sentiment. This analysis will help them to increase the chances of a profitable bet.


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