Over the past month, the entire market has been in free fall, accompanied by Bitcoin. Could the leading crypto finally see some green after finishing another week of red candles?
Bitcoin is trading in the decisive zone
cryptocoin.com As we reported, Bitcoin’s latest drop was the worst quarter performance ever. However, after breaching the ATH level of 2017 with $20,000, the bearish momentum along with the consolidation started to fade. There are still no signs of a possible trend reversal on the daily chart. The price is lackluster despite dropping almost 74% since recording its ATH in November 2021. Bitcoin is trading in the low value zone relative to many price patterns. But despite this, he still sees the lack of buyers.
This triggers another bear move. Aside from the growing negative sentiment and lack of demand, the breakout of the critical level of $17,000 increases the probability of a decline. If this level is broken, Bitcoin will likely head towards $15,000. This will be the lowest level in recent years for leading crypto.
BTC 4-hour chart analysis
On the 4-hour chart, $18,000 has significantly supported bitcoin price over the past few days. However, the price did not succeed in breaking the middle border of the channel. Additionally, there are no signs of any reversal patterns on the short timeframes.
Markets often form a correction pattern right after an expansion move. Bitcoin (BTC) is currently forming a triangle correction pattern as it did in the second half of May when the price consolidated above the $28,000 level. Going forward, there are two possible scenarios:
- Bullish: Price is rising above the middle trendline of the channel and the upper border of the triangle. It is also attempting to break the $22,000 emotional resistance level targeting the upper boundary of the channel.
- Bear: Price cannot start a new bullish move. Instead, it drops below the triangle, turning the $17,000 level into a critical resistance.
- Therefore, the breakout of the triangle will determine the next movement direction of Bitcoin.
What does on-chain data say for Bitcoin?
The whale rate metric reveals the sales behavior of major players. It is calculated by dividing Bitcoin’s top 10 entries into exchanges by all daily entries. Historically, high values of the whale rate metric have led to extreme price volatility.
Since Bitcoin failed to break the $48k level (a clear bull trap) and started falling into the current area of the previous 2017 ATH, the whale rate has risen multiple times, acting as a catalyst for the downtrend. In this case, it is concluded that the whales quickly deposited BTC on the exchanges and increased the selling pressure. However, once the big players start capitulating and realizing big losses, Bitcoin will likely find a bottom for the next bullish cycle.
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