Bitcoin Retreats to Key Support, BTC Bears Have a Fighting Chance?
Since last week, Bitcoin has lost the critical support that kept the price above $24,000. BTC bears may find their chance to delay what was supposed to be the “end of the bear market” and the silence of the crypto winter, according to several experts.
Bitcoin has lost the momentum that drove its price to an annual high; with a price decline, bulls will need to stop the fall in Bitcoin price action to avoid continuing the price drop and prevent a collapse to lower levels.
Bitcoin Bears have the upper hand?
As shown in the chart below, by the research and data analytics firm Materials scientist, the support that held the price above $24,000 has been completely obliterated. Bitcoin has formed a new support floor at the $23,400 level. A wall of resistance has now been included in Bitcoin’s range since February 15 at $24,400.
BTC whales have been continuously buying in the order books, as shown in the chart above, positioning between $1000-$10K. On the other hand, retail investors have been selling Bitcoin and contributing to BTC testing newly formed support.
According to a recent post published by market-leading research and data analysis firm Bitfinex Alpha, the Bitcoin price action caught market investors off guard, resulting in a short liquidation worth $155 million, which sent the BTC price moving to higher levels. Bitfinex added:
BTC hit an eight-month high in the past seven days, hitting $25,000. Massive short liquidations led to the move. While we failed to close a daily candle above this huge psychological and technical level, this is another significant step forward for the asset as we continue to see out what we believe to be the final stages of a vicious bear market.
According to Bitfinex’s research, this type of price action, where longs and shorts are wiped out at the same time, has historically resulted in a range formation. Additionally, the most likely move for BTC is to partially liquidate positions and wait for the range to form without a strong directional bias.
Additionally, BTC bulls can hope for a range formation without further price drops. With a strong bid wall forming at the $23,400 level, Bitcoin could absorb the selling pressure and create a new fundamental support level.
BTC is trading at $23,600, down 3.1% in the last 24 hours. In the seven-day time frame, Bitcoin remains in the green with a gain of 6.5%. Over the past 30 days, BTC’s gains have slowed significantly, with a small gain of 4%.
If Bitcoin fails to hold the next support, it could fall to the $20,000 zone, which could be a victory for the BTC bears in the short term, as future rate hikes could be more aggressive in the upcoming Federal Reserve (FED) meeting , causing a further downward trend.
Featured image from Unsplash, chart from TradingView.
