Bitcoin Claims $20,000, Could It Lose Support Again?
Bitcoin and other major altcoins have been in constant freefall and have even reached multi-year lows. BTC even hit $17,000 this month, but the king’s coin has now recovered its $20,000. Over the past week, the coin has lost 22% of its value, but has risen close to 7% on the daily chart.
The technical outlook for the currency has turned bullish but still reflects signs of weakness. Buyers have also returned to the market, but if purchasing power falls again, BTC may find support near $17,000. It is still difficult to say whether the currency has bottomed out.
Many altcoins also jumped on their cards when Bitcoin showed signs of relief. This also included Ethereum which is up 9% in the past 24 hours. The global cryptocurrency market cap was $950 billion today with an increase of 6.1% change in the last 24 hours.
Bitcoin Price Analysis: One Day Chart
Bitcoin Traded at $20,200 on the One Day Chart | Source: BTCUSD on TradingView
BTC hit its 18-month low as the coin plunged near $18,000 yesterday. Pressure from sellers has continuously pushed up the price of the below. Despite a jump back to the $20,000 support level, sellers are still in control of the market.
The overhead resistance for the call was $22,000 and a drop in the $20,000 will cause BTC to trade near $17,000 to $16,000. BTC trading volume also declined on the chart. The bar was shown in red, indicating that Bitcoin was still in control of the bears.
Bitcoin showed signs of price reversal on the 4 hour chart | Source: BTCUSD on TradingView
On the smaller time frame, Bitcoin showed bullish signals. The Relative Strength Index shot up heavily, hitting the 50-line, meaning buyers in the market re-entered the market. However, in the past 24 hours, there was a drop in the RSI, which marked another small drop in purchasing power.
As the number of buyers increased, the price moved over a line of 20 SMA. This meant that buyers were driving price momentum in the market. An increase in selling pressure would quickly push the price of BTC below the 20-SMA line, giving sellers the power to drive price momentum.
In line with the bullishness, the coin had formed a bearish channel pattern (yellow). This pattern is a bullish reversal pattern that indicates a chance for BTC to rise further on the chart. Purchasing power needs to increase to keep the price stable above $20,000.
Related literature | Over $250M in Liquidations as Bitcoin Recovers Above $20,000
Bitcoin Flashed a Buy Signal on the Four Hour Chart | Source: BTCUSD on TradingView
The coin was bullish on the chart at the time of writing. As a result of the same Awesome Oscillator also showed positive price action. AO determines price trend and reversals. The indicator showed green histograms which are also linked to a buy signal.
Directional Movement Index indicates the directional price movement of the coin. +DI was above the -DI line signifying bullishness. ADX (red) was on the decline and getting closer to the 40 mark, a drop below the 40 mark means the current trend is losing strength and BTC could fall back on the charts.
Related literature | Why Bitcoin Might Take Another Bite at $17K