Bitcoin ($BTC) has established a correction pattern since bearish signals are still active in the market, specifically reduced daily MACD and bearish short-term views. Furthermore, the enhanced gearing and funding rates signified higher tendencies of speculation in the futures market. Thus, large-scale liquidation is possible whenever big support levels are breached.
V-Shaped Move Could Signal Continued Consolidation of Bitcoin ($BTC)
Over the past week, Bitcoin has shown a V-shaped price pattern, trading within the narrow range of $66,700 to $67,700. A brief test of $65,300 and $69,000 added to the volatility as price momentum consolidated.
The RSI indicator is an unambiguous bearish signal on the 4-hour chart which indicates the possible continuation of the correction. Ichimoku Cloud suggests that bitcoin is in a state of transaction/market confusion and the lines that surround it serve as our resistance and support levels. A clear breakout from this range could take the price towards $69,500 or pull it down to other regions.
A bearish divergence is observed in the daily chart of Bitcoin along with an AO & MACD crossover showing the continuation of correction. The MACD crossover which shows bearish alignment has been evident at local tops in the past eight months and hints at potential for further downside.
A break below the 20-day EMA would accentuate the corrective low, while the 200-day SMA remains the counter-bearish trend target. Bulls, on the other hand, may appear to protect $66,000 since this area could slow down the downtrend.
High Leverage in Futures Market Adds to Short-Term Risks
However, opportunities for whaling are looming high even as profits are limited in the short term. A similar pattern historically indicating an increased period of price appreciation, has seen Bitcoin” sharks” with between 100-1000 $BTC amass over 200,000 BTC in the last couple of months.
Furthermore, 42% of the revived supply has a holding time of 2 to 4 years, which means that long-term bulls could be next. Since mid-2020, long-term holders (LTH) have held over 70% of Bitcoin, and short-term holders’ (STH) activity resembles earlier bull markets.
