Bitcoin Drops to Historic Trendline but Bullish Signs Flash, Reversal Inbound? (BTC Price Analysis)

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Bit­coin has been expe­ri­enc­ing a pro­longed bear mar­ket since the all-time high of $69K in Novem­ber 2021. The past 24 hours have also proven to be quite a chal­lenge for the cryp­tocur­ren­cy as it dropped below $19,000. Yet, the next few days or pos­si­bly weeks are like­ly to be crit­i­cal for the mid-term future of BTC’s price.

Technical Analysis

By Shayan

The Weekly Chart

His­tor­i­cal­ly, Bit­coin bear mar­kets have con­clud­ed after par­tic­i­pants under­went a phase of mas­sive capit­u­la­tion and dis­tri­b­u­tion of their assets. Addi­tion­al­ly, there is an ascend­ing 9+ year trend­line on BTC’s chart. This has always sup­port­ed the price and marked the bear mar­ket bottoms.

As the fol­low­ing chart demon­strates, the price has declined to $18K. This lev­el aligns with the above-men­tioned sup­port trend­line, increas­ing the pos­si­bil­i­ty of a trend reversal.

Fur­ther­more, the Week­ly RSI indi­ca­tor has dropped to the under-val­ue range due to Bitcoin’s mas­sive shake­out to the $20K region. It’s worth men­tion­ing that bear mar­kets have also typ­i­cal­ly end­ed when the Week­ly RSI indi­ca­tor entered this under-val­ue territory.

Over­all, if the price drops below the trend­line, anoth­er decline could be immi­nent for Bit­coin towards low­er price channels.

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Source: Trad­ingView

The 4‑Hour Chart

On the 4‑hour time­frame, after form­ing the same con­tin­u­a­tion cor­rec­tion pat­tern for the third time and con­sol­i­dat­ing inside, the price final­ly broke the low­er thresh­old. This result­ed in a mas­sive decline to the $18K sup­port level.

This is the most cru­cial lev­el for the bulls to defend. If the bears suc­cess­ful­ly push the price below this crit­i­cal lev­el, anoth­er clash for pow­er will like­ly occur.

How­ev­er, there is a con­sid­er­able bull­ish diver­gence between the price and the RSI indi­ca­tor in this time­frame. The for­ma­tion, along­side the sen­ti­men­tal pow­er of the $18K sup­port lev­el, indi­cates a poten­tial rever­sal in the next few days.

The cur­rent ques­tion is whether the bulls can hold this sup­port for the fourth time. Next week’s price action could be a clue to deter­min­ing the outcome.

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Source: Trad­ingView
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Dis­claimer: Infor­ma­tion found on Cryp­toPota­to is those of writ­ers quot­ed. It does not rep­re­sent the opin­ions of Cryp­toPota­to on whether to buy, sell, or hold any invest­ments. You are advised to con­duct your own research before mak­ing any invest­ment deci­sions. Use pro­vid­ed infor­ma­tion at your own risk. See Dis­claimer for more information.

Cryp­tocur­ren­cy charts by TradingView. 



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