Bitcoin’s efforts to recover from its two-week drop in price failed as it neared a psychological retreat.
The benchmark cryptocurrency trimmed its previous gains to over $ 34,000 and fell as much as 6.83 percent to trade on an intraday low of $ 31,990. After falling below $ 30,500 in previous sessions, the company has increased its valuation by over 18 percent. However, higher selling pressures in the $ 34,000 to $ 36,000 range limited the benefits and left the price in a troubled range.
So it appears that Bitcoin began to make a series of lower highs after hitting a record high near $ 42,000 on Jan. 8. Meanwhile, stronger buying sentiment in the $ 30,000- $ 31,000 range served as support. The entire trading range appeared like Descending Triangle, a bearish reversal / continuation pattern viewed by professional traders.
At midnight on Friday, Bitcoin retested the triangle’s upper trendline for a breakout but failed. There was a pullback and the price fell back, concerned, to retest the station’s lower trendline. The chances of that continued to rise when CryptoQuant CEO Ki-Young Ju revealed a bearish signal in the chain.
The blockchain analyst noted an increase in the so-called exchange whale ratio, which represents the top 10 Bitcoin transactions divided by the total inflows. If the rate stays below 85 percent, it signals a bull market. Conversely, a value above 85 percent warns of a bearish attack.
On Friday, the Exchange Whale Ratio hit its eight-month high, prompting Mr. Ju to say: “BTC could have a big red candle if the price falls. ”
“It is said to be below 85% if this bull run is legitimate. Otherwise, it is likely a bull trap,” he added.
The $ 20K Bitcoin price target
Bitcoin’s descending triangle formation indicated a lower price retracement if the price falls below its support level.
Technically, after a bearish breakout, an asset should fall the maximum distance between the triangle’s top and bottom trendlines. In the case of Bitcoin, the gap is $ 12,000, making the cryptocurrency below $ 20,000 on the way in the medium term.
However, by adjusting the lower trendline of the triangle pattern, it also looks like a symmetrical triangle, a bullish indicator in an uptrend.
A breakout above the upper trend line, combined with high volumes, should lead to an increase in the Bitcoin price above 50,000 USD in the medium term.