- Bitcoin price is likely to slide below $37,699 to collect liquidity before heading higher.
- Investors can expect an 11% upswing to $42,000 for the big crypto after a liquidity run.
- A daily candlestick close below $35,000 will invalidate the bullish thesis.
Bitcoin price has prematurely triggered a minor run-up, leaving its downside objective unfulfilled. Therefore, investors can expect BTC to slide lower and collect liquidity below a significant level before triggering a full-blown impulse move.
Bitcoin price needs to complete its downside objective
Bitcoin price is traversing an ascending parallel channel, obtained by connecting the three higher lows and two higher highs formed since January 24. The last two retests of the lower trend line of the pattern have led to a bounce to the upper limit.
The third retest is unlike the ones that came before it due to its slow downtrend. Moreover, the downtrend that pushed Bitcoin price from $48,189 to $37,702, failed to push it below the equal lows formed around $37,699.
Therefore, investors should expect a move to the downside that collects liquidity before it heads higher. A sweep below $37,699 will be the trigger that pushes BTC up by 11% to retest the $42,125 to $43,766 supply zone. Interestingly, this level also coincides with the 200-day SMA, making it a tough barrier and a place where the local top could form.
Only a daily candlestick close above $43,766 will allow the Bitcoin price to navigate to $45,510. This move would constitute a 20% ascent.
BTC/USDT 1-day chart
Supporting this short-term downswing in Bitcoin price is the 30-day Market Value to Realized Value (MVRV) indicator. This indicator is used to measure the average profit/loss of investors that purchased BTC over the past month.
Any value of -10% to -15% is termed as an “opportunity zone” since short-term holders are at a loss and are less likely to sell, while long-term holders accumulate. Hence, a local bottom is often formed around these levels.
For BTC, however, the index is hovering around -7.1%, which is just above the first local bottom at -11% This downswing is often where the local bottom is formed, but there are a few times when BTC has dropped to -18.7%. So, there is a good chance for Bitcoin price to drop to these levels again, which aligns well with the outlook described from a technical perspective.
BTC 30-day MVRV
While this minor downswing might seem bearish, the whales holding between 1,000 to 10,000 BTC have increased from 2044 to 2,193 since February 24. This sudden uptick in the number of wallets holding massive amounts of BTC serves as a proxy for these whales’ investments, who are expecting an uptick in Bitcoin price.
Therefore, the long-term outlook for BTC remains mildly bullish, which aligns with the technical outlook’s target of $45,510.
BTC supply distribution
Regardless of the short-term downswing expectation, the big crypto is positioned for a trend reversal. However, if the bears take control and push BTC lower, leading to a daily candlestick close below the $34,752 significant level, it will create a lower low and invalidate the bullish thesis.
In this situation, BTC market makers might tug BTC to nosedive and collect the sell-stops present below the $30,000 level.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
XRP rally likely as Ripple Swell conference is held this week
Ripple trades above $0.5400 early on Monday. The altcoin added over 2% to its value on the day, ahead of a key event. Ripple, a cross-border payment remittance firm, is gearing up for its annual conference called Ripple Swell.
Bitcoin Price Forecast: BTC eyes return to all-time highs
Bitcoin trades close to $66,000 on Monday. The largest asset by market capitalization has noted a steady increase in its demand among traders since April 2024, according to data from crypto intelligence tracker CryptoQuant.
Crypto Today: Bitcoin, Ethereum rally, XRP recovers even as institutional demand for BTC, ETH ETFs slows
Bitcoin rises towards $65,000 on Monday, gaining nearly 4% on the day. Ethereum adds over 3% to trade above $2,500. XRP edges up above $0.53 but trades within its recent range.
Solana Price Forecast: SOL gears up for double-digit gains as demand for meme coins jumps
Solana continues its upward trend this week, rising above the $150 level on Monday. The token of the Ethereum-alternative smart contract chain has gained 3% on the day and is gathering positive momentum at the time of writing.
Bitcoin Weekly Forecast: Will BTC decline further?
Bitcoin’s (BTC) price fell over 6% at some point this week until Thursday, extending losses for a second consecutive week, as it faced rejection from a key resistance barrier.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.