Bitcoin on the verge of a 7% downswing before resuming the uptrend to $20,000


Bitcoin-RSI

Bitcoin on the verge of a 7% downswing before resuming the uptrend to $20,000

  • Bitcoin slides beneath $18,000 after rejection at $18,500, hunting a formidable support.
  • BTC/USD is supported immensely from the on-chain perspective, but technical analysis highlights the 50 SMA as the initial key anchor.

Bitcoin has retreated considerably from the recently traded new yearly high of $18,502. Buyers had hoped to establish support above $18,000 but were overpowered and forced to seek refuge at lower levels.

At the time of writing, the flagship cryptocurrency is trading at $17,735 amid a renewed bearish momentum. The most vital support seems to be the buyer congestion at $17,500. Therefore, holding above this zone is critical for the bulls, as it will allow them to focus on the return journey above $18,000. Besides that, the support may also prevent potential losses below $17,000.

The general trend is still bullish based on the simple moving averages on the 4-hour chart. The 50 SMA appears to be expanding the gap above the 100 SMA. Similarly, the gap between the 100 SMA and 200 SMA is also widening.

However, it is essential to note that selling orders may surge mainly due to panic of Bitcoin slips under the initial support at $17,500. The bulls will do their best to hold the flagship cryptocurrency above $17,000, but the next critical support has the ground at the 50 SMA. On the other hand, extended break down may seek anchorage at the 100 SMA and 200 SMA.

BTC/USD 4-hour chart

BTC/USD price chart
BTC/USD price chart by Tradingview

It is worth noting that the bearish outlook may be invalidated if the bullish picture printed my IntoTheBlock’s IOMAP remains intact. The model reveals the absence of robust resistance ahead of BTC. It means that, if Bitcoin holds above the prevailing support between $17,205 and $17,727, a rally might ensure pulling the price above the subtle hurdle at $18,500.

Bitcoin IOMAP chart
Bitcoin IOMAP chart by IntoThebLock

On the flipside, immense support exists to hold Bitcoin in place and ensure downward price action is mitigated. Besides, the picture seeming bullish from the on-chain perspective, it is vital to be aware that sliding under the initial support might open the door for declines to $16,500 (50 SMA).

Spot rate: $17,800

Relative Change: 25

Percentage change: 0.2%

Trend: Shor-term bullish bias

Volatility: Expanding

Author: John Isige
John is a talented writer with over two years of experience actively contributing to the cryptocurrency industry by providing credible, interesting and easy to read the content. His main focus is on cryptocurrency price analysis and industry news coverage. Lets follow him on Twitter at @jjisige
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John Isige 757 Articles
John is a talented writer with over two years of experience actively contributing to the cryptocurrency industry by providing credible, interesting and easy to read the content. His main focus is on cryptocurrency price analysis and industry news coverage. Lets follow him on Twitter at @jjisige
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