Bitcoin must break above the 50-day MA at USD 20,000 and the 100-day MA at USD 21,100 to exceed USD 25,000. If it drops, the next target would be USD 18,000, but it needs to exceed the upper border to invalidate the bearish wedge.
Although the crypto market still undergoes a phase of uncertainty and low volatility, the price action of cryptocurrencies is steady. The medium-term direction of Bitcoin (BTC) will depend on how it breaks out of its current range.
The Daily Chart of the Price of Bitcoin
The value of Bitcoin created a pullback despite the multi-month bearish serving as its significant resistance. However, a considerable lack of demand in the market causes the bullish momentum to be discouraging.
In addition to declining bullish momentum, Bitcoin faces the 50-day MA at USD 20,000 and the 100-day MA at USD 21,100. The price has to break above those levels quickly to exceed the significant USD 25,000 sentimental resistance level.
As for market sentiment and declining momentum, there might be a price rejection from those critical levels before dropping further.
The 4-Hour Chart of the Price of Bitcoin
The 4-hour chart shows a static range between USD 21,000 and USD 18,000 has struck the price for some time. Meanwhile, the value of Bitcoin has created a bearish wedge pattern.
The price of the pioneering cryptocurrency has formed a double-top pattern. After a rejection by the USD 20.5000 resistance level, it now tests the lower threshold of the wedge.
If it drops, the next target would be the crucial support level at USD 18,000, which the price could break before going deeper. Besides, Bitcoin must exceed the upper border to invalidate the bearish wedge.
To summarize, the multi-week bearish trend line is the primary barrier in the path of BTC toward USD 21,500 and USD 25,000.
The Estimated Sentiment Leverage Ratio
Over the last week, the Exchange Netflow metric has registered a higher volume of trading outflows. That may have been a portfolio restructuring in the stock market, but prolonged market activity occurred due to little positive sentiment.
Besides the significant outflows, the Estimated Leverage Ratio metric reached an all-time high. That situation indicates that traders use riskier leverage in the futures market.
However, the dominance of activity in the derivatives market is evident with the lack of new retail investors. Despite significant foreign exchange (FX) outflows and a high leverage ratio, the relatively neutral funding rate indicates the price movement needs to set a direction.
Meanwhile, Bitcoin is trading at around USD 19,113 and has accumulated a 0.6% loss over the last 24 hours. While its daily trading volume is above USD 24.54 billion, its market capitalization is about USD 366.51 billion, according to CoinGecko.
Bitcoin plays a relevant role in the global economic system, which an increasing number of institutional investors demonstrates. However, it is necessary to wait to see how the behavior of the market will influence its price in the coming days and weeks.
By Alexander Salazar
