Bitcoin price is approaching a significant level, which could be decisive for the market direction in the medium term. While there are some positive signs on the technical charts, it is still too early to tell if a new bullish phase is on the horizon.
On the daily chart, bitcoin price has formed a large bearish wedge over the past few months. The price recently bounced from the lower end of the pattern and is currently heading higher towards the important $18k resistance.
In the event of an upward breakout from the $18k level and the 50-day moving average hovering around the same price, an impulse towards the upper boundary of the pattern can be expected, near the psychological level of $20k.
On the other hand, rejection from the $18,000 level could cause another decline towards the $15,500 level, and another retest of the lower trend line of the falling wedge might occur.
4 hour chart:
Looking at the 4-hour time frame, the price managed to breach the minor resistance level at $16,800 and is currently retesting it.
In case of a successful pullback and continuation, a rally towards the $18k region will be imminent. However, the RSI should be watched closely in the coming days, as it has recently shown an overbought signal. It may also form a bearish divergence soon.
The latter could lead to a bearish reversal in the near future, which could be disastrous. That is likely to start a decline to the $15,500 support area and possibly lower if the level does not hold.
Bitcoin Miner reserve
2022 showed how bad the Bitcoin bear market could be. After several defaults and bankruptcies in recent months and a sharp drop in prices, miners seem to be giving up.
Miners can be considered the most important participants in the Bitcoin network, as they are responsible for its validation and security.
They have also accumulated huge amounts of BTC over the past few years, and the buying or selling pressure can move the price exponentially. Therefore, the miners’ surrender is terrible news.
According to the Miner Reserve metric, which measures the total amount of Bitcoin held by mining wallets, they have been selling BTC in huge amounts recently, which can be seen on the chart by the significant drop in reserves.
This worrying sign comes after many rumors that miners are failing to pay their debts and thus could set the market up for another massive crash in the near term.
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