Bitcoin price is showing signs of recovery as it settles above the major support level of $18,000. The cryptocurrency’s medium-term future – in price terms – may be decided in the next few days, as the market is currently testing key levels.
The $18,000 support level prevented the cryptocurrency from reaching a new low again. The market recovered from this level and broke above the important descending trend line around $19,000.
The 50-day and 100-day moving averages are the next dynamic resistance levels. The price must move behind them in order for the chart to turn to the upside in the short term. In the event of a breakout, the $24,000 resistance level will be the next target, and the price reaction there will likely define the medium-term contour of the crypto asset.
However, there is always the possibility of a false breakout above the trend line. This could lead to the formation of a bull trap, as we have seen on several occasions in recent months.
In short, a breakout and retest of the aforementioned trend line and both moving averages will be crucial for a more reliable uptrend.
4 hour chart
In the four-hour period, there was little change as the price was still swinging in a narrow horizontal range between the $18K and $20K levels. Currently, the $20,000 resistance is being tested once again, and it is hard to reject the price on the downside.
In the event of an upward breakout, the $23,000 level would be the next potential destination. However, given that the RSI is entering the overbought zone above 70, there is also the possibility of a false breakout and a bull trap – similar to the daily time frame.
Both price action and the RSI should be monitored closely over the coming days to determine if a bearish divergence will form or if a valid break above the $20K level is possible.
Doubts and uncertainty plagued financial markets in 2021. There have been two very volatile periods due to inflation, as well as broader geopolitical turmoil.
The chart below shows the dynamics of Bitcoin supply based on the Realized Cap – UTXO Age Bands (%) metric. This particular metric standardizes coin groups based on their longevity and their share of the total cap achieved.
The increase in these age groups indicates the accumulation among its long-term holders. On the contrary, decline indicates selling pressure and distribution behaviour.
The market is currently going through a significant accumulation phase, as the number of coins transferred in the past six months is steadily increasing.
Post BTC $20,000 Tests As Buyers Try To Build Momentum But Is This Another Bull Trap? (Bitcoin Price Analysis) First appeared on CryptoPotato.