As the year comes to a close, Bitcoin’s price action presents a mixed narrative, leaning bearish in the near term. Traders and investors are closely monitoring critical levels and chart patterns to anticipate Bitcoin’s next significant move. Below, we analyze the key features shaping the current outlook. ???️
Donchian Channel Basis at $100,241:
On December 26th, Bitcoin’s high approached this level during a retracement from the recent low at $92,118. However, it failed to reach the basis, signaling a bearish hint. This reflects a lack of bullish momentum after the sharp decline from the all-time high of $108,364 on December 17th. ???
The $92,118 level, which marked the low on December 20th, remains a crucial support. ???
Bearish Pitchfork Formation:
Price retraced not only to the Donchian channel basis but also to retest this pitchfork’s middle line. Such retests are often seen as potential setups for further downside, amplifying bearish pressure. ???
The black line represents the 20-day Exponential Moving Average (EMA), currently slanting downward which is bearish. The Bitcoin bulls seeking to reconquer the 100k mark must first overcome the EMA20 daily resistance line!. ?⬆️⬇️
Recent Price Action and Bearish Signals
Lower High Formation: The failure to reclaim the Donchian channel basis or the EMA20 highlights the absence of significant buying interest. This lower high is a key bearish structure that aligns with broader declining momentum. ??️?
Potential Scenarios Ahead
If Bitcoin breaches the $92,118 support level, further downside could accelerate. Key levels to monitor below include $88,500 and potentially $86,000, representing significant psychological and structural supports.
Bitcoin could consolidate between $92,118 and $97,149 (the EMA20). Such a range-bound movement would signal indecision and allow traders to reassess momentum indicators.
For a bullish case to gain traction, Bitcoin would need to reclaim the EMA20 at $97,149 and close above $100,241 (the Donchian channel basis). This would suggest a stronger retracement or even a reversal towards the previous highs.
Bitcoin’s inability to sustain a move above the EMA20 and its failure to touch the Donchian channel basis signal ongoing bearish pressure. The key support at $92,118 is under threat, and a breakdown could lead to significant losses in the short term. While a bullish reversal remains a possibility, the current signals suggest traders should prepare for further downside. ??⬇️
As always, traders should remain cautious and adapt their strategies to market developments. Monitoring volumetric stats, key support levels, and the broader crypto market environment will be critical in navigating Bitcoin’s next moves. ⚖️??️ Always trade Bitcoin at your risk only.
This article was written by Itai Levitan at www.forexlive.com. Read More Details
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