Bitcoin Price at Risk of Dropping to $21,750 as Technical Indicators Suggest, Amidst Market Quietness
Summary:
Bitcoin (BTC) price could potentially drop to $21,750, as technical indicators suggest, in what is being dubbed as one of the quietest periods in the crypto market. The horizontal trading range and bear flag pattern indicate a potential downward breakout for BTC. Additionally, Bitcoin is nearing a death cross formation between its 50-day and 200-day moving averages. The views expressed in this analysis are the author's own and don't reflect those of Cointelegraph.
Bitcoin (BTC) continues to trade at depressed levels, making it one of the quietest periods in the history of the crypto market. However, several technical indicators and fractal patterns suggest that the BTC/USD pair could drop to as low as $21,750 in the coming months. Let's analyze the nearest support levels to determine the potential decline in the Bitcoin price.
Bitcoin has been consolidating within a horizontal trading range since mid-August 2023, with resistance at $26,670 and support at $25,650. Though there have been brief breakouts, the BTC price has remained within this range, forming what appears to be a "bear flag" pattern. This pattern is typically followed by a downward breakout and a price drop equivalent to the previous downtrend's height. Based on this analysis, the bear flag target for Bitcoin is around $23,000, indicating a potential 15% drop from the current price levels by the end of the year.
In the past, Bitcoin's bear markets have often found support near a common ascending trendline. In November 2022, the price tested this trendline at around $16,750 and has since seen a 70% increase. Although there are indications that Bitcoin may have already reached its bottom in the ongoing bear market, the price needs to break decisively above the 0.236 Fib line at approximately $28,350 to confirm a long-term bullish recovery based on historical fractals. Currently, Bitcoin is trading below this Fib line, raising the possibility of a retreat towards the bear market trendline support near $23,000.
Furthermore, Bitcoin is approaching a potential death cross formation between its 50-day and 200-day exponential moving averages (EMA). Previous death crosses during the Federal Reserve's interest rate hike period have preceded price declines of around 17-18%. If the fractal plays out again, the bearish target for Bitcoin would be around $21,750.
It is important to note that the views, thoughts, and opinions expressed in this analysis are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Published At
9/17/2023 2:08:23 PM
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