Bitcoin Price Fights to Hold $9.5K to Stave Off a Trend Reversal

On Feb. 20 Bitcoin (BTC) price surprisingly dropped 8.85%, a motion which defenseless many investors off guard as upwards to that moment the digital asset had recovered well from the President's Day weekend correction and was trading sideways in the $10,200 range. Citing data from CoinMetrics, ARK Invest crypto analyst Yassine Elmandjra tweeted that the $ane,000 price drop was the fifth largest USD correction to occur on the hourly time frame since 2022.

Since the sharp downside move, traders, analysts, and crypto-Twitter have been attempting to pinpoint the source of the wink crash and a handful of theories have arisen. Some have attributed the volatility to the consecutive unplanned Binance commutation outages which halted trading on the platform and prevented many traders from beingness able to log into their accounts.

Others, like, Cointelegraph contributor and Bitcoin trader filbfilb speculated that a shortage of Tether (USDT) at Binance could maybe accept contributed to the current market conditions.

In his Telegram-based trading channel filbfilb explained that the USDT shortage perhaps shows that the majority of traders were in long positions, an observation further supported past the decreasing pace of Bitcoin'due south momentum and the liquidation of $120 million leveraged longs at BitMex.

BitMEX XBTUSD Liquidations. Source: Skew.com

Regardless of the reason, the drop to $9,346 shook a lot of investors from their Bitcoin and altcoin positions and the electric current state of the marketplace is negatively impacting investors' bullish sentiment every bit they are choosing to await on the sidelines for a clearer signal that a bottom has been reached.

Crypto Fright & Greed Index. Source: Alternative.me

Is the electric current price action a buy the dip opportunity or is Bitcoin on the verge of a significant trend change? Let'due south cheque the charts to encounter.

Excited traders disregarded the tweezer top

BTC USDT daily chart. Source: TradingView

As shown past the daily nautical chart, Bitcoin formed a tweezer superlative candlestick blueprint at $10,250 later on recovering from the previous weekend'southward drop to $9,450. This should have been a signal that the likelihood of a pullback could occur but traders were probably feeling bullish after Bitcoin's quick recovery from $9,450 placed the digital asset dorsum above key support levels.

Despite the shock caused by yesterday's correction Bitcoin price still institute support at the loftier volume node of the volume profile visible range (VPVR) at $9,300 to $9,438. While this is reassuring, some cautionary notes are depression purchasing volume which highlights a lack of buyers interested in stepping into the current dip and the country of the 2 near ofttimes referenced oscillators by traders not yet registering oversold conditions.

BTC USDT 6-hour chart. Source: TradingView

On the half dozen-60 minutes timeframe, the relative strength index (RSI) has yet to manage an oversold bounce and the moving boilerplate convergence divergence (MACD) line continues to plummet, pressing on -100 at the fourth dimension of writing.

Traders will besides detect that the MACD histogram confined keep to elongate in negative territory (below 0) and the design of lower highs in the 6-60 minutes chart is unbroken.

Bearish scenario

If buyers proceed to believe the current price action is non a 'purchase the dip' opportunity the price could drop below the VPVR loftier book node ($9,438) and the 200-twenty-four hours moving average at $viii,800 where in that location is another VPVR loftier volume node.

The shorter timeframe shows the cost slowly making higher lows but the purchasing volume is not meaning enough to hold the toll above $9,600. Over the short-term, bulls demand to defend the $9,500 support (black arrow on chart below) as the daily and weekly timeframe shows it to be a key level. A more significant trend change could push button the toll lower to $eight,800 to $eight,400.

Bullish scenario

If we zoom out to appraise Bitcoin's price action since reaching its 2022 superlative at $thirteen,800 on June 26, 2022, we can see that the 38.2% Fibonacci Retracement level has been a frequent surface area where the price has bounced later potent corrections.

BTC USDT daily nautical chart. Source: TradingView

Since June 26, 2022, the cost has bounced here more than x times and yesterday'southward pullback brought the price to the 38.6% level once more. Information technology's crucial that the price stays above this level because the 38.6% Fibonacci retracement has besides functioned every bit a potent resistance once the price dips below it.

On the flip side, assuming the price breaks out, we can likewise run into that the last 3 Bitcoin rallies on Oct 12, 2022, February 12, 2022, and February eighteen, 2022, accept failed to break above the 50% Fibonacci Retracement level. Thus, Bitcoin toll needs to secure a few daily closes to a higher place $10,250 (l% Fibonacci retracement) before any calls for $xi,000 can be seriously considered.

For the brusk term, Bitcoin toll needs to knock out $nine,630 and above this toll, $9,750 is likely to office as a level of resistance. A more disarming maneuver would be to see Bitcoin price overtake the 20-MA of the Bollinger Band indicator and sustain above $9,850.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You lot should comport your own enquiry when making a decision.

Source: https://cointelegraph.com/news/bitcoin-price-fights-to-hold-95k-to-stave-off-a-trend-reversal

Posted by: kruegerbittly.blogspot.com

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