A significant pullback from a bullish long-term trend is underway, but the Fibonacci retracement indicates the decline might stop. The price remains locked in a descending wedge, suggesting a trend reversal, but it must cross the resistance at USD 21,500.
Since the bulls have not shown enough determination to drive the price of Bitcoin (BTC) higher, it is re-testing support at USD 19,000. The following weekly analysis indicates that a necessary respite might occur in the short term.
BTC is trading at around USD 19,292 and has accumulated a 0.4% loss over the last 24 hours. While its daily trading volume is above USD 13.18 billion, its market capitalization is about USD 368.18 billion, according to CoinGecko.
Although volatility has dropped significantly over the last week, fear still dominates the market, causing further problems in the short term.
According to the weekly CryptoQuant metrics overview, investors do not want to leave the market. It might mean they are still waiting for the price of Bitcoin to bottom out.
While Bitcoin has lost 70% of its market capitalization over the last few months, stablecoins have only lost 11%. The reserves of stablecoins on exchanges are equivalent to half of the funds in BTC.
The Weekly Analysis of the Price of Bitcoin
The monthly BTC/USDT chart shows that the price remains locked at the support around USD 19,500.
While the long-term trend is bullish, a significant pullback from this direction is underway. The price is near the 78.60% Fibonacci retracement level, where the decline might stop. However, it is still impossible to confirm that.
If the price lost the support zone in which it is, the ground might be clear for the 88% Fibonacci. That level coincides with support at USD 10,760.
The price of Bitcoin going down to between USD 10,000 and USD 11,000 still seems too unlikely to occur. Anyway, there should be a significant respite to the upside first. The short-/medium-term trend is bearish, so the latest momentum in that direction is quite predominant.
The Daily Chart of the Price of Bitcoin
The daily timeframe shows that the price remains locked in a descending wedge. When that figure forms relevant support, it announces a possible trend reversal.
Before confirming a change in trend, the price must cross the descending line that delimits the figure. The most conservative might expect it to break through the resistance at USD 21,500.
If that does not happen, the price of the pioneering cryptocurrency will remain at risk. This weekly forecast will become invalidated if it loses support at USD 19,000. Therefore, there will probably be strong selling over the next few days.
Many investors have become aware that Bitcoin has played a relevant role in the world economy. Although it has suffered a sharp drop over the last few months, many analysts still see it as a long-term store of value. It is a matter of time for the behavior of the market to indicate whether the price will rebound to previous all-time highs.
By Alexander Salazar
