These are the two critical levels for BTC to determine the medium-term trend (Bitcoin Price Analysis)
Bitcoin’s price is approaching a significant level, which could prove decisive for the medium-term trend of the market. Although there are some positive signs on the technical charts, it is still too early to determine whether a new bullish phase is on the horizon.
Technical analysis
Of: Edris
The daily chart:
On the daily chart, Bitcoin’s price has formed a large falling wedge in recent months. The price has recently bounced back from the lower boundary of the pattern and is currently trending upwards towards the significant resistance level of $18K.
In the event of a bullish breakout from the $18K level and the 50-day moving average hovering around the same price, a rally towards the upper boundary of the pattern, near the $20K psychological level, can be expected.
On the other hand, a rejection from the $18K level could lead to another decline towards the $15,500 level and a retest of the lower trendline of the falling wedge will occur.
The 4-hour chart:
Looking at the 4-hour time frame, the price has successfully breached the minor $16,800 resistance level and is currently retesting it.
In the event of a successful pullback and continuation, a rally towards the $18K area would be imminent. However, the RSI indicator should be watched closely in the coming days as it has recently produced an overbought signal. It may also form a bearish divergence soon.
The latter could lead to a bearish reversal in the near future, which could prove disastrous. That will likely initiate a drop back to the $15,500 support area and perhaps even lower if the level does not hold.
Analysis of the chain
Bitcoin Miner Reserve
2022 has shown how bad a Bitcoin bear market can be. After several defaults and bankruptcies over the past few months and a horrific drop in prices, the miners are seemingly starting to capitulate.
Miners can be considered the most important participants in the Bitcoin network, as they are responsible for validating and securing it.
They have also accumulated huge amounts of BTC over the past few years and their buying or selling pressure can move the price significantly. Therefore, miners capitulating is terrible news.
According to the Miner Reserve metric, which measures the total amount of Bitcoin held by miner wallets, they have recently sold BTC in large chunks, which can be seen on the chart by the significant plunge in the reserve.
This worrisome signal comes after several rumors that miners are unable to repay their debt, and therefore could set the market up for another massive crash in the near term.
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