After the extreme volatility seen recently, now the tide has calmed. What does this behavior tell us?, in the Bitcoin analysis and forecast that I perform below we found out.
At the time of this writing, BTC is trading at $29,741, accumulating a gain of 2.03% in the last 24 hours, although maintaining a slight loss of 0.57% in the last 7 days.
In the weekly summary of CryptoQuant, the general reading of indicators tells us that investors are waiting for a real low.
The metrics related to supply/demand and whale behavior, speak of a long-term bullish sentiment.
However, technical oscillators, market sentiment, and a key on-chain indicator, say we could see the search for a new low.
The open interest in futures markets reached $1,000 million, and traders are overleveraged. Generally, this is a negative for the short term.
The LTH-SOPR indicator tells us that both short-term and long-term holders are selling at a loss (possible capitulation). However, the MVRV and the NUPL indicate that the price is about to enter an undervalued zone.
Bitcoin weekly forecast
Today on the weekly Bitcoin chart the forecast we can get is bearish for the short term.
Despite the good buying pressure on the $30,000 support, we still don’t see any more reversal signals.
The recent bearish volume is still very dominant, and this recent sentiment could still cause more problems.
Despite everything, we see that the price is already close to the 200-period SMA, strong sales are quickly wrapped up, and the long-term trend is still in the hands of buyers. It is quite likely that the bottom is very close.
The 8-week EMA and 18-week SMA moving averages are crossed to the downside, following the short/medium-term trend. Overcoming them would be the ideal signal to confirm that the previous direction is being resumed. At the moment, this is far from happening.
It seems that the best we could see in the short term, is a broader lateral behavior.
Key short-term levels
To make a more accurate forecast of Bitcoin for the short term, we will review the daily chart. Here we can quickly identify a downtrend.
After the flash crash that touched a low of $26,700, the price breathed upwards, but without showing signs of reversal. Now we see BTC locked in a bearish pennant, where it will most likely break to the downside.
It is feasible to expect a possible bullish escape, because we are on a relevant support. But, the recent low determination of buyers, does not allow this scenario to have many probabilities on their side.
If the current average of $29,000 is missed, it is likely to see a search for the nearest support level, located at $26,300. Further down, the next one is at $22,720.
In case an upward rally occurs, it would not be too important as long as they are not exceeded $40,000. As I said in previous paragraphs, it is more likely to see a broader sideways behavior, before resuming the long-term trend.
All our publications are of an informative nature, so in no case should they be regarded as investment advice.
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