- Bitcoin price saw an explosive 9.3% growth between October 25 and 29.
- Due to the developing bearish divergence, BTC could slide lower and revisit the $19,700 support structure.
- A successful flip of the $21,000 hurdle into a support floor will invalidate the bearish thesis for the big crypto.
Bitcoin price saw a surge in buying pressure between October 25 and 29, which propelled it to set up two distinctive tops. Due to the inherent bearish nature of this structure, BTC is likely to retrace lower and clear the imbalance.
Bitcoin price needs to shed weight
Bitcoin price consolidation from October 13 saw a conclusion on October 25 as it rallied 9.3% and set up a local top at $21,030. This explosive move was followed by a minor pullback to $19,951, which resulted in a 5.6% upswing.
In hindsight, this move was a liquidity run as Bitcoin price produced a higher high at $21,083. Since this point, BTC has dropped 3% and is currently trading at $20,453. A lower low below the $20,000 psychological level will reinforce the bearish outlook.
The second reason why Bitcoin price could slide lower is that the higher highs produced on October 26 and 29 seem to diverge from the Relative Strength Index’s (RSI) lower highs. This setup is known as bearish divergence and indicates that the asset’s value is rising despite the declining momentum, which will eventually lead to a reversal for the underlying asset.
Moreover, a move lower will also provide a rebalance to the inefficiency that Bitcoin price created on its way up. Therefore, interested investors can open a short position and book profits at the $19,700 support level.
The aforementioned level is an ideal place to accumulate. If there is enough bullish momentum, Bitcoin price will likely continue its uptrend and revisit the next significant level at $22,106.
BTCUSDT 4-hour chart
While things are looking gloomy for the Bitcoin price, a successful flip of the $21,000 hurdle into a support floor will bid adieu to the bearish divergence in play. This development will invalidate the pessimistic outlook for the big crypto and propel it to $22,106, which is the next significant level where BTC is likely to form a local top.
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