Bitcoin price could fall 7% if bulls sit back
- The price of bitcoin has fallen below a short-term ascending parallel channel pattern.
- Bitcoin could retest the four-hour moving averages EMA and SMA at $22.861 and $23.199 respectively before dropping to $21.286.
- A refutation of the bullish thesis would mean a reversal of the four-hour moving average SMA at $23.199 at the support level.
Bitcoin (BTC) price is showing a clear sign of consolidation below an ascending parallel channel. Although the bearish outlook has yet to be confirmed, the bulls are unlikely to rest in the knowledge that another crash could happen soon.
The price of bitcoin continues to shrink
The price of bitcoin has been known to move sideways since the collapse caused by the Silvergate banking crisis on March 2nd. This sudden sell-off caused bitcoin to fall below the ascending parallel structure shown in the chart below.
Although a break of this structure suggests a downtrend downtrend and even a bearish move, more confirmation is needed. Meanwhile, market participants can expect the price of bitcoin to trigger a rally that marks the four-hour exponential and simple moving average (EMA, SMA) at $22,861 and $23,199 respectively.
Failure here would be the first step to getting the bears in control. A quick spike in selling pressure could see bitcoin price drop to the next key support level at $21.625. In some cases, this move could narrow down to support for the 200-day EMA at $21.268.
Bitcoin price could mark the 200-day SMA at $19,716 in a worst-case scenario.
On the other hand, if a bounce from the rally causes the price of Bitcoin to create a daily candle near the $23.199 support level, that would invalidate the bearish thesis. However, investors should wait for the secondary confirmation that comes after BTC breaks the psychological $25,000 level.
In such a case, the price of Bitcoin could be heading towards the next major barrier at $28,000.
Akash Girimat, FXStreet
Akash has been working in the crypto industry as a content writer and analyst for over two years. He is a mechanical engineer interested in new technologies and financial markets. Lured by the chaos of trading, he has invested in cryptocurrencies and maintains a small crypto fund for his friends and family.
The opinions expressed here are solely those of the author and do not necessarily reflect the views of Forex Quebec. Every investment and trading move involves risk, so you should do your own research when making a decision.
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Disclaimer: The information and opinions contained in this report are for general information only and do not constitute an offer or solicitation to buy or sell foreign exchange contracts, CFDs and cryptocurrencies. Although the information contained herein has been obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness and accepts no liability for any direct, indirect or consequential damages that may result from anyone relying to such information.