Bitcoin: Predict BTC’s likely response to this support level
Disclaimer: The findings in the following analysis are the sole opinions of the author and should not be considered investment advice.
Over the past ten weeks, Bitcoin [BTC] observed choppy movements, with the price lingering around the high liquidity level. Something evidenced by the Point of Control line (POC, red).
BTC saw a relatively dull phase after an expected breakdown from the reversal pattern of the past two weeks.
The ongoing selling pressure has kept the baseline (green) of the Bollinger Bands (BB) from looking north. With a number of support levels colliding in the $19.2k-$19.9k range, buyers will look for redemption before giving in to bearish trends.
At press time, BTC was trading at $19,949.36 on the charts.
BTC Daily Chart
Source: TradingView, BTC/USDT
At the time of writing, BTC was trying to revive from the lower band of BB. Should the $19.9k level maintain its value in investors’ minds, the coin could see a near-term revival towards the POC level in the coming sessions.
This revival could extend the press phase near the high liquidity area. In this case, the potential targets for the coin would be in the $21.5k-$22.5k range.
However, the coin has been in a slow phase for quite some time now. So the sellers would aim to continue their efforts to drive a bearish fleeting break.
With the baseline still looking south, buying volumes will need to mark a significant rebound to invalidate the bearish tendencies. Any drop below the $19.9k support could trigger a further move towards the $19.2k-$18.9k support range.
Justification
Source: TradingView, BTC/USDT
The decline of the relative strength index (RSI) towards the oversold zone resonated with the increased bearish edge. A plausible reversal from these lows could provide a short-term recovery path.
Chaikin Money Flow’s [CMF] higher lows during the day marked a bullish divergence with the price. The indicator still needs to regain a place above the 0.21 level to confirm a robust revival. Nevertheless, the ADX projected a weak directional trend for the coin.
Conclusion
Given the confluence of support levels in the $19.2k-$19.9k range, any pullback could inflict a short-term rally against POC. A close below the above range will confirm the bearish bias. The goals will remain the same as discussed.
Investors/traders should also take into account macroeconomic factors that affect broader sentiment. This analysis will help them increase the chances of a profitable bet.
