Posted 2 hours ago
If history is any indicator, the collapse of the rising wedge pattern can lead to a drastic drop in bitcoin price. Since the beginning of 2022, this particular pattern has occurred twice, and the outcome of the previous two caused 30-40%. If market action follows this pattern theory, BTC price could fall below $19,000 and dive to a new lower low.
BTC Analysis Key Points:
- The Fibonacci indicator reflects that the BTC price has fallen below the 50% retracement level
- The 20-day dynamic support turned into a possible resistance
- Bitcoin intraday trading volume is $25.3 billion, indicating a 27.3% loss
Source-trading view
On Aug. 16, BTC price recorded a bearish breakout from the rising wedge pattern, signaling the end of the short-term rally. The resulting decline coincided with news that the US Federal Reserve could raise interest rates by 0.75 in September, triggering a sharp retracement.
The drop after the retest accounted for a 12% loss that pushed the BTC price to $20785 with local support. However, after such a sharp drop, the price has recovered slightly over the past two days, posting a 3% gain.
However, despite rising prices, volume activity is waning, suggesting weakness in bullish exposure. Therefore, with continued buying, BTC price is likely to test the flipped resistance of $22600 which could replenish the bearish momentum.
Expected reversal from $22,600 would encourage sellers to break from $20,785. Furthermore, the technical setup for the wedge pattern collapse has seen the ongoing crash break the June-July $19,000 bottom support and reach $16,000.
While things are looking better for sellers, a potential breakout could allow bulls to resume the recovery rally above $25,000 if buyers took trend control from sellers at $22,600 resistance.
Technical indicator
Bollinger Band Indicator: BTC price broke the indicator’s lower band during the recent decline, suggesting that the selling pressure was too sudden for the given time. Thus, the indicator supports the relief rally theory before prices continue falling lower.
MACD indicator: The wide spread between the fast and slow lines reinforces the aggressive selling pressure in the market. Additionally, these slopes are on the verge of falling below the neutral zone, suggesting additional confirmation of an extended sinking.
- Resistance levels – $22580 and $25000
- Support Levels – $207850 and $19000
For the last 5 years I have worked in journalism. I follow the blockchain & cryptocurrency for the last 3 years. I have written on a variety of different subjects including fashion, beauty, entertainment and finance. Contact me at brian(at)coingape.com
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.
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