Bitcoin has been in a rut after a string of dismal days on Wall Street. An important barrier needs to be broken soon. As a direct result of this, the price of bitcoin is currently suffering a pullback.
Is this just a little correction in the near term, or does it signal the beginning of a new leg down in the negative direction?
After failing to break through the critical $25,000 mark, the price dropped shortly thereafter on the daily period. The 50-day moving average close to the $22,000 price point would be the first potential support level to consider.
The 200-day moving average would then come into play around the psychological support point located at about $20,000 after this.
When these moving support levels are breached, there is a greater likelihood that the market will continue to decline. Right up until it reaches the $18,000 mark.
But if the stock can recover at any of these prices, then it’s worth keeping an eye on. This outcome is the most likely one. There is a substantial possibility that yet another examination will be administered.
In addition to the likelihood of smashing through the $25,000 barrier that has been holding it back. The Relative Strength Index (RSI) is an indicator that has signaled the latest decline with a strong bearish divergence.
The Negative Divergence Emerged After the Latest Rejection
That is getting dangerously close to the 50% mark. It indicates that the momentum has reached equilibrium on a daily basis. This bearish divergence was generated after the recent rejection.
This bearish divergence has signaled that the present price action is rejecting the trend. A look at the chart for the past four hours reveals that there has been a decline in pricing.
After being turned down by many groups offering around $25,000, you decide to take matters into your own hands. We’re going dangerously close to a $22,500 support level.
This development occurred after the price experienced a series of rejections from the region around $25,000. In the next weeks, additional market drops are possible if this level is broken, which occurred earlier today.
A possibility of hitting $20,000 or maybe $18,000 at the very least. This would be the case in the event that the threshold is broken.
The RSI, on the reverse hand, is dangerously near the oversold area at the moment. It could cause a short-term increase above $22,500. In the event that the Relative Power Index (RSI) continues to dip below the oversold level.
This temporary uptick could probably result in a breakout above the $25,000 threshold. A breakout above the $25,000 level would be followed by more bullish price action in the coming weeks.
Possible End to the Bear Market
If such a breakout were to take place, the bear market may finally be regarded to be over from a technical perspective.
Bitcoin’s value has been on the rise recently. Since then, the number of bullish opinions has increased. It’s been widely discussed in the business world.
Hackers, on the opposite hand, are an important cog in the wheel that is the Bitcoin economy. But, they haven’t demonstrated any indicators of beneficial behavior as of yet.
The statistic for miners’ reserves is plotted in the following chart. Bitcoin wallet balances are tallied to determine the overall number of Bitcoins held by miners. You can get more information regarding this statistic here.
The effectiveness of this measure has been steadily declining over the course of the past few months. Some people are unloading their Bitcoins to ease trading conditions.
It covers their operating expenses, and some miners have given up entirely. It’s closing its doors permanently. In the event that this pattern persists, the amount of selling pressure could cause the market to become saturated.
It is a case of supply exceeding demand. The price would then fall by an additional amount as a direct consequence of this. This would occur if this trend continues.