After spending the past few days trading in a narrow area, the Bitcoin price (BTC) has fallen from its upscale structure and closed below the 20-day moving average ($ 18,600).

After the bitcoin price crossed $ 19,888, a number of analysts warned that the bitcoin price would be in danger of a sharp downturn if it fails to secure a daily close above $ 19,500, or at least keep $ 19,000.

During the last bullish phase of Bitcoin, the price remained above the 20-MA, so the daily close during this calculation could be an indication of the need for a short-term trend reversal. In this case, it also appears that the bulls have not yet bought the current bearish.

When the price fell, the closest daily crypto analyst Alex Saunders said, “Unless the price holds $ 18,700, the descending triangle is likely to push us lower in the short term.”

On the other hand, Cointelegraph analyst Michael Van de Pope tweeted that despite the drop, the bitcoin price is:

“It is still in the area, but the more often the support is tested, the weaker it becomes. Volatility is likely in the $ 18,500 to $ 19,500 range.”
Van de Poppe also explained that “the BTC price level below $ 20,000 was accompanied by a decrease in volatility and volume, making it difficult to predict the direction of the next move”.

Now that BTC appears to be trading in a descending triangle, traders will look at $ 18,013 to see if the price can form a double bottom at the triangle support. Below this level the visible area and market structure of the volume profile suggests support also at $ 17,800.

The 4-hour RSI is also entering the oversold zone, which means that an oversold rebound can occur, but this move will require significant buying volume to push the price into SMA 20, where the resistance is likely.

look forward
A bullish event could mean that Bitcoin will make the aforementioned double bottom and then return the 20-MA and the $ 19,000 level to support at least the 4-hour close.

On the other hand, if $ 17,800 is not supported as support, the Bitcoin price may fall to $ 17,200 and then to $ 16,400, which is close to the 23.6% Fibonacci retracement.

In a previously published analysis, Michael Van de Pope also indicated a large CME gap from $ 18,275 to $ 16,995.

According to Van de Pope:

“Overall, 95% of CME gaps are closed, which increases the likelihood that the price will return to these levels in the short term.”
This indicates that failure to maintain the aforementioned support levels increases the likelihood that Bitcoin price will take liquidity down and return to the $ 17,000 level.

Source: CoinTelegraph