- bitcoin price moves in unison above a stable support level at $21,209.
- an increase in selling pressure could lead to a sell sweep – stop liquidity below the $20,750 level or a sharp correction to $20,000
- a daily candlestick close above the psychological level $25,000 will invalidate the bearish outlook.
bitcoin price shows a strong consolidation on a lower time frame, an ascending parallel channel, repeating the motif of three larger channels that have developed on higher time frames since early 2022.
A breakdown of the last channel could result in a correction to the $20,750 or $20,000 support levels before a recovery rally begins.
Reading: Bitcoin news prediction
bitcoin price in a bit of a mess
Bitcoin price clearly shows three parallel ascending channels that have developed over the last eight months, all of which have led to bearish breakouts. The most recent was on August 19, when BTC fell 10% from roughly $23,200 to $20,800.
As a result, the bitcoin price has now created approximately three equal lows around $20,750. Despite this drop, BTC managed to recover above the highest level of traded volume, also known as the point of control (POC), at $21,209, a positive achievement.
regardless, the liquidity below these swing points at about $20,750 is the main target of the market makers, so they will most likely push the price of btc lower to sweep this level again before attempting a bullish rally.
However, before jumping to conclusions, let’s take a look at a chart over a shorter period of time.
btc/usdt 1 day chart
On the one hour chart, bitcoin price appears to be forming another ascending parallel channel, a fractal “echo” of the larger time frame channels, and this too is very close to breaking. however, the highest volume traded between August 18 and August 22 is approximately $21,437. this level, also called a control point (poc), will serve as a support level, and a turn of this support point into a resistance barrier will confirm a lower time frame breakout.
However, market participants should also be aware of the higher $21,209 timeframe, which could simultaneously thwart bears’ plans. therefore, waiting for a secondary confirmation, provided by a breakout of $21,209, will add more credence to the idea of a selloff at $20,750.
btc/usdt 1 hour chart
While the forecast of a drop to collect liquidity makes sense, it may never happen if the price of bitcoin does not drop below the support floor of $21,209. instead, a bounce off this barrier could prematurely trigger a recovery rally.
In such a case, market participants can expect bitcoin price to find the lock at $22,382 to $22,586. Overcoming this hurdle will be relatively easy to overcome, pushing btc to fill the imbalance at $23,175 and potentially form a local cap.
describing the potential for a bullish outlook
if the recovery rally thesis explained above continues to gain momentum, it could propel bitcoin price to retest the $24,989 hurdle which is the midpoint of btc’s 44% drop witnessed between the 31 May and June 18.
This level has been particularly difficult to break through in the past, as btc failed after three attempts in August. therefore, a decisive daily candle close that turns this barrier into a support floor will be a strong indication of the presence of bulls and a resurgence of buyers.
Such a development will also invalidate the bearish thesis and pave the way for a recovery to $29,000.
As seen on the one-day chart, the area between $28,000 and $29,000 is likely to be where the relief rally will face enormous selling pressure from holders booking profits; therefore, a local ceiling could form here.