Bitcoin Tests $17,000, But Is Another Crash Imminent? (BTC price analysis)

Bitcoin price broke above a large moving average that has acted as resistance for the past few weeks. It seems that the market is poised to go higher next week if the remaining negative factors do not hinder the building momentum.

Technical Analysis

past: Idris

daily chart:

On the daily timeframe, the price finally closed above the 50-day moving average to the upside, after failing to do so and rejecting it several times over the past few weeks.

It seems that this breach paved the way for a rally towards the $18,000 resistance level, and maybe even higher. A break above the wedge pattern is likely to lead to a bullish price action in the medium term, as it is considered a reversal pattern in a bear market.

However, if the price drops below the 50-day EMA, then the chance of a decline towards the $15k support area will increase accordingly.

Source: TradingView

4 hour chart:

Looking at the 4-hour chart, the scenario of a false breakout and a false decline seems more likely, as the price has yet to breach the $17,000 resistance area to maintain the formed bullish momentum.

In addition, the RSI is showing a clear bearish divergence signal, which enhances the possibility of a reversal in the near term.

An impulsive rejection from the current price level is likely to lead to a decline towards the $15,500 support, which will be the bulls’ last resort.

In general, things are starting to get interesting from a technical point of view, as the behavior of BTC around the $17K mark over the next few days is likely to determine the medium-term direction of the crypto market.

Source: TradingView

On-chain analysis

past Cheyenne

The following chart includes a realized price metric, which is one of the most valuable indicators for determining whether Bitcoin is undervalued or overvalued. Usually, the price stays above the achieved price during bull market cycles. On the contrary, during the final capitulation phase of a bear market, the price drops below the achieved price, which leads to great fears and uncertainty. During this period, market participants are under a lot of pressure and they allocate their assets to avoid further losses and control their exposure to more market fluctuations.

Looking at the previous cycles, the beginning of the bull market is expected when the market price exceeds the achieved price. This has yet to happen, as the cryptocurrency fails to breach the achieved price, followed by a short move lower.

Thus, the sustainability of any positive price movement is questionable unless Bitcoin exceeds the achieved price ($19.7K).

Source: TradingView

Bitcoin Tests After $17K, But Is Another Crash Imminent? (BTC Price Analysis) appeared first on CryptoPotato.

Leave a Reply

Your email address will not be published. Required fields are marked *