BTC price gave up its gains above $27,000 last week, and briefly settled at $26,000 before starting the new week with losses into the $25,000 range. Trading at $25,677 on Tuesday, the largest crypto, worth $500 billion in market capitalization is down 1.2% over 24 hours.
Indicators, both on-chain and micro show that BTC price might suffer another dip before staging a substantive rebound into the expected bull market after the halving in 2024.
With that in mind, investors appear to be sitting on the sidelines, afraid to take a stand until Bitcoin decides on the next course; either a breakout above $30,000 or an extended dip below $20,000.
BTC Price Struggles In Search For Support
The price of Bitcoin has hit a crossroads with support at $25,000 likely to lead to consolidation ahead of a significant breakout. On the other hand, a recovery will likely ensue if bulls reclaim $26,000 support/resistance.
Failure to uphold the descending channel support at $27,000 last week led to the trimming of gains back to $26,000. Hence, the next recovery attempt must have enough momentum to break out of the channel or sustain price action beyond resistance at $28,000.
After hitting highly oversold conditions last week, the Relative Strength Index (RSI) is back in the neutral zone. However, its sideways movement reveals that neither buyers nor sellers have a clear upper hand.
This could also imply that BTC price may assume a choppy market condition, wobbling between support at $25,000 and resistance at $26,000 for some time before the next breakout; whether toward $30,000 or to $20,000.
The Moving Average Convergence Divergence (MACD) indicator confirms that sideways price action. Traders may start to seek exposure to BTC price longs as the blue MACD line increases the gap above the red signal line and the momentum indicator generally climbs toward the mean line (0.00) and into the positive territory.
BTC Price Forming Head and Shoulders Pattern
Bitcoin is in the process of forming a head and shoulders (H&S) pattern on the weekly timeframe chart, which may lead to the confirmation of a much lower bottom price point before the bull run comes.
However, for the pattern formation to complete BTC price will have to let go of support at $25,000, which has been reinforced by the 200-day Exponential Moving Average (EMA) (purple).
The RSI affirms the bearish grip on Bitcoin as it slides below the midline, targeting the oversold region beneath 30. A break below the neckline at $22,072 would be needed to confirm the pattern.
Such a breakout would be accompanied by a sudden increase in volume, as bears drive the price below $20,000, with the lower level around $15,500 being the ultimate sell-off target.
Crypto trader and analyst, Rekt Capital shared a similar sentiment on YouTube, implying that BTC price is yet to bottom and may return below $20,000 to sweep liquidity around the major support at $15,500 before the next bull market.
For now, investors should keep their eyes on support at $25,000 which if defended could abandon the foreshadowed H&S pattern breakout in favor of a rebound above $30,000.
Related Articles
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
