Here’s Why Technical Chart Hints Bitcoin (BTC) May Lose $20750 Support
In our previous articles, we mentioned that the BTC/USDT pair showed some repetitive patterns, which triggered a significant sell-off during the past eight months. This pattern is called an inverted flag pattern and encourages sellers to continue the prevailing downtrend. Though the pattern breakdown has positioned the coin for a significant downfall shortly, the price is currently teetering above $20750.
Key points from BTC analysis:
- Sustained buying may drive the BTC price to $22500 before resuming the prevailing downfall.
- The bullish breakout from $22550 will invalidate the bearish thesis
- The intraday trading volume in Bitcoin is $15.5 Billion, indicating a 27.58% loss
Source-Tradingview
The Mid-July to August recovery in the BTC chart revealed the same pattern and pushed the price to $25135 higher. However, in August’s second week, the crypto market witnessed sudden selling pressure and breached the pattern and support trendline.
This pattern completion suggests the short-term recovery has ended, and the BTC price will continue the long-term downtrend. Thus, the price has tumbled 15.5% from the previous swing high of $24550 and plunged to the local support of $20750.
Inverted Flag Pattern In Four-hour Chart Reveals Further Downfall
Source-Tradingview
Even the ongoing consolidation since last week has revealed the same pattern. The BTC price currently trades at $21744 and retests the rising channel’s resistance trendline. Under this pattern influence, the price should eventually pierce the support trendline.
This pattern should end the current consolidation in the sellers’ favor and plunge the prices below the $20550 support. This breakdown may ignite an 8.2% fall to reach the $20000 psychological support.
However, in an unlikely situation, the Bitcoin price may give a bullish breakout from the pattern’s resistance trendline, or if the relief rally prolongs, the prices could reach the $22500 mark.
Technical Indicator
EMAs: the downsloping 20-day EMA nearing a bearish crossover with a 50-day EMA should offer a sell signal for traders. Moreover, these EMAs accumulating at the $22500 mark reflect a high area of interest for price reversal.
RSI: the daily-RSI slope rising reflects the current relief rally in price action. However, the indicator still below the midline indicates the market sentiment is still down
- Resistance level- $22500 and $24550
- Support level- $20750 and $20000
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