Source : ambcrypto.com
After a rather short-lived string of higher troughs and peaks within the bounds of a three-month up-channel (yellow), Bitcoin [BTC] headed south while dropping below some critical price points. While the near-term trajectory clearly revealed a bearish vigor, BTC HODLers were defending the 16-month floor at $28.8K.
The king coin now stood in a critical position. The $30.8K to $31.4K range could lay a foundation for a rally on either side. At press time, BTC traded at $30,498.
BTC Daily Chart
Soon after declining from its ATH, BTC saw a gradual but consistent collapse on its peaks. The sinking phase transposed into a squeeze between the $34.4K and $47K that lasted for over four months.
The recent bearish pull from the 61.8% Fibonacci resistance caused a highly volatile break. As a result, BTC broke down below the $34K level and propelled a 36% retracement toward its 16-month low on 12 May. The recent recovery entailed a bearish rising wedge on the daily timeframe. With the EMA ribbons and Fibonacci resistances constricting most bullish recovery attempts, the next few candlesticks would be critical in determining the future movements of the coin.
With an overextended gap between the EMA ribbons, BTC could be under a threat of falling below its 23.6% Fibonacci level. Such a move would open up a path to a rising wedge breakout toward the long-term baseline of $28.8K. On the flip side, should the bears dwindle in view of high buying volumes, any close above the $30-$31K would make room for a retest of the EMA ribbons.
The RSI’s downfall from 4 May finally took rest at the 24-mark support. A continued revival from its oversold lows would only be likely in the coming times. However, the magnitude of this revival will depend on the willingness of the buyers to amplify the buying volumes.
Also, the On balance Volume undertook a bearish divergence with price in the last week. This reading could play a spoilsport in the BTC’s efforts to find a robust close beyond the 23.6% Fibonacci level.
While it may not be an overstatement to say that bears unequivocally steered the current trend, the king coin is walking on eggshells. A sustained close below the $30.4-$31.3K level could reignite some selling pressure. In which case, a close below the wedge could lead to undesired losses.
Should the sentiment improve enough for the buyers to recoup, the investors/traders must watch out for a close above the $31K-mark to capitalize on short-term gains.