Bitcoin could fall even lower but must hold these important levels

Bitcoin could fall even lower but must hold these important levels

Bitcoin is holding the formation and remains in a long-term broad consolidation. However, in recent days, the leading cryptocurrency is clearly weakening, rubbing against the lower border of the upward channel. Because of this, the altcoin market is suffering. So, let’s determine where the critical levels for BTC to hold are located.

Current situation 

On January 13, bitcoin began to form a rising channel, which has been functioning until today. We observe in it a successive movement of the price between the limits set by the formation (white lines). Currently, the value of BTC is testing the lower ends of the indicated pattern. While volumes remain at low levels, inside the channel we can see the descending cone formed since mid-April (yellow lines). In the current situation, it is definitely a bullish sign, suggesting a potential rebound. It is supported by the RSI indicator, which shows a clear divergence. What is interesting is the behavior of the MACD. We can see on it repeated and unsuccessful attempts to bullishly cross. The last time a similar situation with a similar duration occurred in the summer time of 2020. At that time, bitcoin was in consolidation after the bounce after the famous March crash, as well as after the halving. It was also the time before the bull rally.

Bitcoin’s limits of endurance

Many analysts have been asking themselves where the price of Bitcoin can go to ensure that sentiment still remains relatively bullish, while providing hope for further gains. As it turns out, there are several answers to this question.

The bottom border of the uptrending channel discussed in the previous paragraph is one of the important deviations for the price, but not the most important. When we zoom out on the chart, we can see that bitcoin is in an even wider channel. It is marked here with yellow lines. The price of BTC has repeatedly experienced contact with the lower of these lines, as well as a subsequent upward bounce. This is a level that should definitely be watched. It is currently oscillating around $35,000 and is steadily rising.

However, the so-called stop loss hunting of those who created sell orders at levels below the macro channel is not excluded. Then a descent to the lows of June 2021 is still possible. If we observe the candle wick drawn below $30,000 on the chart, we can still remain calm. However, if the price closes in these areas and holds in the following days, it could be a confirmation of a possible bear market.

Cryptocurrency market capitalization

A relatively rare phenomenon is the failure to successfully play the divergence. However, we experienced a similar situation on the total cryptocurrency market capitalization chart. Currently, it is difficult to see any anomalies. The total market capitalization is testing the level from which it broke out by crossing the descending channel and still has the right to go lower. MACD, just like on the Bitcoin chart, is constantly trying to make a bullish breakout, but so far still unsuccessfully. Breaking through the $2.2 trillion level is crucial for sustaining the upside.

Altcoin market capitalization

A very interesting thing can be noticed on the chart of the altcoin market capitalization (excluding Bitcoin and Ethereum). First of all, the formation of a descending channel was clearly negated. At the same time the capitalization of altcoins for the third time tests the area between 585 billion USD and 625 billion USD (grey rectangle). This may indicate a potential triple bottom, especially as the MACD suggests an upcoming upward movement.

Picture of Łukasz

Łukasz

Market Analyst

Disclaimer: Blockbulletin does not take accountability of investments based on the information of the website. We highly advice readers to make extensive research prior to any invest

Share this article

More analyses

It seems we can't find what you're looking for.

More news

Bitcoin conference 2021

Bitcoin 2021 Conference

The biggest event in Bitcoin’s history is now behind us. The Bitcoin 2021 Conference, held in Miami, was a historic gathering of investors, whales, maximalists and enthusiasts…
Coinbase lists Dogecoin

Coinbase lists Dogecoin

DogeCoin – one of the coins that is driving the 2020/2021 bull market has been listed on Coinbase Pro exchange since June 3. This is a real…
Google lifts cryptocurrency advertisement ban

Google lifts ban on cryptocurrency advertising

At the beginning of June, Google announced breaking news – the ban on cryptocurrency advertising services through the leading search engine will be lifted. However, some restrictions…
Cryptocurrency exchange Coinbase adds Apple Pay

Coinbase adds Apple Pay

In early June, exchange Coinbase announced the integration of its debit card with Apple Pay. Users of the service can also take advantage of the cashback feature.…
Ethereum energy discussion

Bitcoin energy discussion

May 2021 was a very hectic time in the history of cryptocurrencies. Despite a promisingly unraveling bull market, there were gigantic declines. There were many reasons for…
Ethereum flipping bitcoin

Will Ethereum surpass Bitcoin?

With the early 2021 surge in the cryptocurrency market, the discussion on whether Ethereum can surpass Bitcoin in terms of market capitalization has become heated. We are…
Ethereum

What EIP-1559 means for Ethereum (ETH)

EIP-1559 is one of the most important and, above all, the most talked-about updates to come to the Ethereum network. It raises a lot of controversy and…
Anonymous hits at Elon Musk cryptocurrency bitcoin

The influence of Elon Musk on cryptocurrency

A fundamental feature of the Bitcoin market is its decentralization. This means, among other things, that an individual has no influence on the fate of the cryptocurrency.…
Bitcoin institutional investments

Institutional investment in Bitcoin

The world of cryptocurrencies is booming. This is shown, among other things, by the bull market at the turn of 2020/2021. Its special feature is something that…
All articles loaded
No more articles to load

Learn more

It seems we can't find what you're looking for.

Latest news

All articles loaded
No more articles to load