Bitcoin price could be forming a massive consolidation pattern that spark a significant downtrend
Bitcoin price has failed to break out of the tight trading range that has been stuck for the past few weeks. Currently, the short-term trading range that Bitcoin has established is in the field of $ 9,000 to $ 10,000. The support and resistance at each of these levels are extremely strong.
BTC/USD 4 hours chart | Source: Tradingview
The Bitcoin price is blinking, forming a bearish distribution pattern
At press time, the Bitcoin price is trading slightly lower at the current price of $ 9,410. This is the price range that it was trading at the time after the recent drop to $ 8,900. Nevertheless, Bitcoin has formed lower lows in the past few weeks. First, it headed at $ 10,400, then $ 10,050, and now $ 9,600 seems to be its short-term high.
Therefore, soon, we should watch closely to see if Bitcoin will confirm the potential bearish distribution pattern it will form later this year. Looking at the chart below, we can see this grim possibility. This makes it clear that this model has striking similarities with past price history.
Source: Capo Of Crypto Charts via TradingView
The boundaries on the chart also indicate that this pattern will only be confirmed if Bitcoin has a sustained decline below $ 8,600. Even so, Bitcoin buyers are likely to disable this strong technical weakness if they can push the BTC price higher in the days and weeks to come.
According to cryptocurrency analyst Chase_NL, the bearish distribution pattern may be invalidated if the bulls can push Bitcoin above $ 10,085. He noted that this would then open the ports to transfer to $ 11,500.
Gut tells me that $BTC is distributing.
To change my mind I need HTF closes above 10085.5. Then I’ll get long with an 11.5K target.
I’m not currently short, but I am looking for a setup. I don’t want to open a position in this strong consolidation so waiting for an opportunity. pic.twitter.com/6mw3FvZgl0
— Chase_NL (@Chase_NL) June 18, 2020
Bitcoin price still has much hope of increasing because of the following factors
Despite these excessive discount factors, Bitcoin can still be well-positioned to see some noticeable gains in the medium term. This advantage can be provided by two main factors: BTC’s ability to maintain its position above the 100 and 200-day moving averages and its robust trading volume.
For these factors in creating a strong uptrend, buyers must keep Bitcoin high above the next days and weeks.
According to Crypto analyst Michaël, the ability to maintain both the 100 and 200-day moving averages as well as Bitcoin forming a strong volume profile despite its lackluster price action as of late is extremely important.
Just a picture sharing the significance of the 100-Day and 200-Day MA.
And we’re acting above that, so no reason to be extremely bearish (in my opinion).
Volume also nice. pic.twitter.com/Y4q6dP0RTm
— Crypto Michaël (@CryptoMichNL) June 18, 2020
For Bitcoin to rise higher soon and confirm this potential strength, there is a critical price area that must be protected. It is an area of prices between $ 9,200 and $ 9,250 – a critical support area – and ardent defense of this could allow the uptrend to continue.
You can also check Bitcoin Price here.
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