Is a retest of $19K on the way for BTC? (Bitcoin Price Analysis)

Market movements often consist of two phases – an expansion phase where the price changes sharply in both directions, followed by a correction phase where the price forms continuation patterns. This analysis aims to examine this structure throughout the ongoing bear market.

Technical analysis

Of Shayan

The weekly chart

Bitcoin has been declining since the end of 2021 ATH and formed extension movements followed by correction phases. Currently, the price has fallen below the 200-week moving average (~$23K), which is the most critical and decisive level for Bitcoin, followed by a pullback. Meanwhile, the cryptocurrency has formed a continuation correction pattern and was rejected from the upper limit.

Considering the aforementioned price action patterns, there is a good chance that Bitcoin will plunge from this price level and reach regions of lower demand. However, the likely bearish stage could be the final move down to complete the capitulation event between the market participants.

The 4-hour chart

After experiencing a bearish expansion move a few weeks ago, Bitcoin had formed a familiar wedge price action pattern. On the other hand, the $19K level has acted as excellent support and started another bullish rally. However, after breaking the wedge’s upper trendline and forming a pullback, the bulls overcame the bears and BTC experienced another rally.

The rally is proving to be an effective bull trap, the price has plummeted since then. Considering this bull trap and price action, it looks like Bitcoin is likely to experience another leg down to retest $19K. If the significant support level of $19K fails to hold the price, Bitcoin’s next destination will be $16K.

Onchain Analysis

Miners Fee to Reward Ratio calculates the percentage of the fee in the total block reward. Usually, during a bull run, this indicator increases and indicates higher values, showing greater miner incentive to mine Bitcoin and more network activity, a sign of a healthy bull market.

In contrast, the indicator falls significantly during bear markets, almost close to zero, indicating capitulation. However, the metric experienced a steady increase at the end of bearish cycles, a sign of accumulation among market participants.

As a result, Bitcoin has always experienced an increase and started the next bullish cycle after the accumulation. Currently, the calculation has dropped to zero after BTC experienced a 75% drop in price and is slowly rising.