Bitcoin Trading Flat, But Is A Drop Below $18K Imminent?

Bitcoin continues to consolidate around the $19,000 support level as bulls attempt to prevent a deeper crash. If unsuccessful, this could prolong the ongoing bear market and put even more pressure on participants.

Technical analysis

Of: Edris

The daily chart

On the daily time frame, the price has retested the $18K support level after rejection from the major bearish trend line. The 50-day and 100-day moving average lines have also rejected the cryptocurrency.

If BTC pulls back from the current support zone, the above-mentioned moving averages and the bearish trend line will be major dynamic resistance levels before the $24K area, which is a significant static resistance point.

Price should break above all of these to reverse the ongoing negative trend. On the other hand, if the $18K level is breached to the downside, a quick crash towards $15K and beyond becomes more possible.

The 4-hour chart

The price has been hovering in a tight range between $18K and $20K for the past few days, preparing for the next decisive move.

A double bottom pattern has formed at the $18K level recently, which could push the price towards $20K again. In the event of a bullish breakout, both $22,500 and $24K would be key resistance levels to watch in this time frame.

The RSI indicator is also in a state of equilibrium, recently hovering around 50. The bulls and bears are currently struggling to gain control, and the market could break out in either direction.

However, considering the higher timeframe bearish trend, a breakdown below $18K remains the more likely scenario.

Onchain Analysis

Of Shayan

Markets usually tend to bottom out when players experience significant losses, referred to as “Capitulation”. Since long-term investors control most of the supply, the Bitcoin market emphasizes their losses. A multi-year bottom cannot happen without a long-term capitulation phase for the owners.

The long-term holder SOPR’s 30-day exponential moving average and BTC price are shown in the chart below. It becomes clear that long-term owners capitulated over a longer period during previous bear markets.

The indicator has dipped below 1, a signal that long-term investors are under pressure to distribute. This has often initiated the final phase of the bear market.

However, it should be understood that this phase may require several months of volatility, followed by many significant shakeouts.