The Calm Before the Storm: Bitcoin Rangebound Since June, Has a Breakout Happened? (BTC price analysis)

The cryptocurrency market continues to go through a phase of uncertainty and low volatility along with steady price action. Currently, Bitcoin is trapped in a range, and the direction it takes to break out of it will determine the direction of the cryptocurrency in the medium term.

Technical Analysis

past Cheyenne

daily chart

Although the multi-month trend line that acts as a significant resistance has fallen, the price has broken through and formed a pullback. But at the moment, the upward momentum is not promising, as there is a huge lack of demand in the market.

Besides the lower bullish momentum, the price is facing two major resistances; The 50-day moving average is at $20,000 and the 100-day moving average is at $21.1000. Bitcoin needs to break through these critical resistance levels very quickly to start a break above the important emotional resistance level of $25,000.

Ultimately, with market sentiment and lower momentum, the price will likely be rejected from these key levels and undergo another drop.

Source: TradingView

4 hour chart

On the four-hour period, the price has been stuck in a stable range between the $21,000 level and the $18,000 level for some time now. Meanwhile, Bitcoin formed a bearish wedge pattern (shown in the chart below).

The price formed a double top pattern, rejected the resistance at $20.5K, and is now testing the lower wedge.

In the event of a decline, the market will target the key support level of $18,000, which could be broken and a deeper decline. On the other hand, the upper edge must be broken upwards to nullify the descending wedge.

In summary, the multi-week descending trend line is currently the main barrier in BTC’s path towards the $21.5K and $25K levels.

btc_price_chart_10102
Source: TradingView

Sentiment Analysis

Calculated leverage ratio

The Exchange Netflow metric recorded a relatively higher volume of outflows from exchanges in the past week. While these may have been portfolio restructurings at the exchange level, the lack of positive sentiment prompted them to expand market activity.

The chart below shows the estimated leverage ratio along with the funding rate. Besides the large outflows, the measure of the estimated leverage ratio has also risen to an all-time high, indicating that traders are using more leverage with higher risk in the futures market.

But the absence of new retail investors shows that the derivatives market is widespread. Despite the large inflows of the currency this week and the high leverage ratio, it appears that the relatively “neutral” funding rate is the reason the price action has not set a direction yet.

Therefore, the market is likely to go through an extended phase of the range followed by a fake price movement.

btc_price_chart_10103
Source: CryptoPotato

After the Calm Before the Storm: Bitcoin Rangebound Since June, Has a Breakout Happened? (BTC Price Analysis) First appeared on CryptoPotato.

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