Bitcoin’s rapid downward trend has come to a halt as the price has been hovering above the $17,000-$20,000 area for the past few weeks. After being rejected three times from the $20,000 support zone, the price is currently retesting the $23,000 resistance level.
The daily chart
Currently, the 50-day moving average is acting as additional resistance at the $23,000 level. It seems that these two points are currently rejecting the price lower, and in this case another retest of the $20,000 support level and even a deeper bearish continuation is predicted. However, the bulls seem keen to claim the level.
Therefore, the price action on the lower frames should be watched carefully over the next couple of days to determine the likelihood of a bearish reversal from an upside breakout. In particular, if a bullish break above $23,000-$24,000 occurs, a rally towards the $30,000 supply zone would not be out of reach.
The 4-hour chart:
On the 4-hour time frame, it is evident that price is still trapped inside the bearish flag pattern and is currently retesting the pattern’s upper trendline for the fourth time. Price action in this area has shown some weakness. Moreover, the bearish divergence of the RSI indicator, formed between the last two highs, reinforces this observed weakness.
Therefore, the most likely outcome is a rejection of the current resistance level leading to a bearish continuation towards $17,000 and beyond. However, this scenario would be invalid if the price breaks the uptrend and holds above the $24,000 level. In this case, a bullish leg towards the $30,000 supply zone would be highly probable.
As shown in our previous analysis, miners have recently entered the capitulation phase and have distributed their assets slightly. The same behavior is seen in Bitcoin’s hashrate, as it trended slightly lower after hitting a new all-time high during the recent massive crisis.
Considering Bitcoin’s price is down about 74% from its all-time high and mining might not be lucrative for many miners and pools, this slight drop in hashrate is not unexpected. However, given the magnitude of the recent price correction, the hashrate is still holding up quite well. Bottom line, the miners’ capitulation has historically marked the last leg of the bear market. Thus, there is a high probability that Bitcoin is about to find its long-term bottom and start a new rally towards higher price levels.
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Cryptocurrency charts by TradingView.