Is Bitcoin Headed to $21K or Will the Bulls Bounce Back? (BTC Price Analysis)


After forming a bearish three-drives reversal pattern, the price has recently dropped below the neckline, delivering a significantly bearish signal for the short-term outlook. As of now, BTC faces an important support region at $21K.

Technical Analysis

By Shayan

The Daily Chart

As expected, the three-drives pattern resulted in a trend reversal and a decline in the price. Bitcoin was recently rejected below the neckline and is consolidating with very little momentum.

However, a pullback to this broken neckline is necessary to confirm the change in Bitcoin’s recent bullish trend. If a pullback occurs, the price will potentially enter a mid-term downward stage, returning the fear to the market.

BTC’s following support levels are $21K and the 200-day moving average, standing at $19.7K.

btc_price_chart_0803231
Source: TradingView

The 4-Hour Chart

After forming a major swing at $25K, Bitcoin’s price initiated a downtrend, forming an ascending wedge pattern. Following an impulsive bearish move, the price reached the wedge’s lower boundary at $22K and began consolidating.

Bitcoin currently faces a significant support area consisting of the wedge’s lower boundary and the $21K major support level. Presently, the bearish momentum has decreased.

As a result, the price will possibly enter a short-term range stage, demonstrating the battle between buyers and sellers at this vital price area.

To conclude, a breakout from the wedge in either direction will determine the mid-term direction of the price.

btc_price_chart_0803232
Source: TradingView

On-chain Analysis

Miners are a vital cohort among market participants, and their selling behavior deeply affects the market as they have a large number of coins. They also impact the market in terms of traders’ sentiment.

Related:  Cryptonews.com

This chart demonstrates the miner reserve metric, measuring the number of coins held by the miners’ wallets. Despite many on-chain metrics indicating bullish signs during the recent stage of the market, the miner reserve metric has entered a bearish trend and reached new yearly lows.

This shows that the recent bullish spike in BItcoin’s price has provided a great chance for the miners to offload their assets, controlling their expenses. This selling behavior could end up as a mid-term bearish sentiment in the market.

btc_miner_reserve_chart_0803231
Source: CryptoQuant
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Cryptocurrency charts by TradingView.



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