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BTC forming a double bottom chart setup. |
Technical Analysis
Daily Chart:
Considering the present market structure, the 100-day and 50-day moving averages appeared likely to form a bearish cross within the next few days, adding more selling pressure.
On the other hand, if the price closes above the $37K level shortly, the bearish breakdown would be considered false and could result in a recovery towards $40K. The RSI was also reaching the oversold area, indicating a possible bullish pullback and a local bottom before further potential continuation of the bearish trend.
4-Hour Chart:
On the 4-hours timeframe, the price had been forming a falling wedge over the past few weeks after getting rejected from the $43K area. It broke out of the falling wedge before dropping back quickly, invalidating the pattern.
This fake breakout leads to a drop from the sizeable bearish flag, which had been forming over the previous couple of months. This behavior indicated a bearish continuation in the short term, and the price could create a new lower price below the previous $33K bottom.
The RSI had also entered the oversold area during this timeframe, a sign that could lead to consolidation or a bullish pullback in the short term before the next bearish leg happens.
On-chain Analysis
Bitcoin Exchanges Reserve:
Bitcoin’s price experienced a large drop yesterday, breaking below the $37K support. Bearish sentiment was starting to take over the market once again as investors feared a continuation towards $30K and below.
Meanwhile, the exchange reserve had been on a sharp decline over the past few months, as bitcoins were often withdrawn from exchanges. Interestingly, amid this aggressive accumulation and the risk of a supply shock, the price was still on the decline.
This structure pointed out the lack of demand in the market considering the economic and government uncertainty around the world. In addition, the futures market played a large part in this crash, as a long squeeze occurred yesterday, which led to a fast drop in price.
Final Verdict
On Daily Time Frame, Bitcoin was forming a Double Bottom. The chart idea discussed a possible move toward 57500, but this was only a chart observation. DYOR before taking any trade.
BTC Forming a Double Bottom chart on TradingView. by uumerejaz on TradingView.com