- 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.
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
Ripple's XRP could rally to $4.75 despite rising profit-taking among investors
Ripple's XRP continued its rally on Wednesday as it looks to test the upper boundary of a key flag channel. Following the recent price rise, investors booked profits worth nearly $800 million while options traders bet on the remittance-based token hitting the $5 mark.
Caroline Crenshaw's renomination vote postponed, as crypto industry pays keen attention on voting procedures
The Senate vote on Wednesday regarding the reappointment of Securities & Exchange Commission Commissioner Caroline Crenshaw has been postponed due to a clash with procedural rules following a shift in the initial schedule.
Ethereum Price Forecast: ETH eyes new yearly high as whale and institutional holdings increase
Ethereum is up 6% on Wednesday after bouncing off the support level near $3,550. The spot market shows institutional investors and whales maintained a bullish sentiment, potentially scooping up ETH at lower prices during the recent dip.
Bitcoin reclaims $100K following release of US CPI data for November
Bitcoin surged above $100K on Wednesday following the release of the US November Consumer Price Index data, which came in line with expectations at 2.7%. Crypto investors quickly reacted to the report as market participants now anticipate that the Federal Reserve will cut rates by 25 basis points next week.
Bitcoin: Long-awaited $100K milestone meets profit taking
Bitcoin ends the working week hovering around $98,000 after a very volatile Thursday when it surpassed the $100K milestone and underwent a sharp correction. Strong institutional demand, whale accumulation, and the choice of a pro-crypto figure to lead the US SEC fueled the rally this week.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.