The price reacted positively to the support zone around the USD 19,000 area, where the 2017 bullish rally stopped. The scenario could be discouraging if the bearish trend increases and the price loses support at USD 18,500.
After the sharp drop in the price of Bitcoin (BTC), a rebound is likely to begin. The following technical analysis shows that the exhaustion near USD 18,500 might give way to a respite in the coming days.
Bitcoin is trading at around USD 20,930 and has accumulated a 2.2% gain over the last 24 hours. While its daily trading volume is above USD 25.72 billion, its market capitalization is about USD 398.56 billion, according to CoinGecko.
There are still no signs that the price has bottomed out, but several metrics indicate that it is already a long-term opportunity.
A graph shared by analyst Will Clemente on Twitter shows that Bitcoin is sitting below its 4-year trend. He says this has only happened three times in the history of the pioneering cryptocurrency. The previous two occurred during the bottom of the 2015 bearish market and the crash caused by the COVID-19 pandemic in 2020.
Weekly Technical Analysis and Forecast of the Bitcoin Price
The daily BTC/USDT chart shows that the price reacted positively to the support zone around USD 19,000. That is the area where the 2017 bullish rally stopped.
A price motivating extreme greed a couple of years ago now fuels fear among investors. That indicates the long-term trend of which the current situation is just a necessary correction.
Analysts now wonder how far the price will drop before resuming the dominant trend again.
Although no signs indicate that the price has bottomed out, recent behavior suggests that at least one significant rally will begin shortly.
While the Relative Strength Index (RSI) is in an oversold zone, short-term bearish momentum is running out of relevant support. A respite is healthy and necessary for the price to recover. If the latter breaks through resistance at USD 22,583 in the process, there might be a significant pullback.
The Price May Have Bottomed out by There Are No Confirmations
The price is breaking through the 200-week SMA, which has usually served as support to search for bottoms from previous bearish markets.
The RSI is as oversold as at the bottom of the 2018 bearish market and even lower than the 2020 COVID-19 crash.
However, a bearish weekly candlestick is closing but has not yet shown any significant signs of exhaustion.
The reluctance of buyers suggests that there should be at least a multi-month sideways range before resuming the higher trend.
If the bearish volatility increases and the price loses support at USD 18,500, the scenario could be discouraging. Then the ground would be clear for around USD 11,500.
A significant respite is highly likely to begin from the current point. It is only a matter of seeing how the market behaves before the price of Bitcoin recovers to previous levels.
By Alexander Salazar