by The cryptocurrency market never sleeps, and neither do the analysts who study its every move. In this daily analysis, CoinDesk analyst and Chartered Market Technician Omkar Godbole delves into the latest trends affecting Bitcoin (BTC) and what they could mean for investors. The recent BTC crash on Friday has raised eyebrows, particularly as it appears to reinforce a significant resistance level established during previous bull cycles in 2017 and 2021.
The Significance of Trendline Resistance
“Once is an accident, twice is a coincidence, three times is a pattern.” This old adage rings particularly true for the Bitcoin market, as the latest crash marks the third consecutive failure for bulls to maintain gains above a critical trendline drawn from the historic highs of 2017 and 2021. This persistent inability to hold above the trendline suggests a potential deeper drop, with predictions indicating that Bitcoin may fall to $100,000 or even lower.
CoinDesk had previously highlighted this trendline resistance a month ago, noting that bulls had already failed to sustain gains above it on two separate occasions. The long wicks seen in the July, August, and October candlesticks signal fatigue among bulls, indicating that the upward momentum may be waning.
Analyzing Momentum Indicators
One of the most widely used tools for assessing market momentum is the MACD (Moving Average Convergence Divergence) histogram. Currently, the MACD histogram on the monthly chart remains positive but has shown a decline compared to the December-January rally when BTC first broke above the $100,000 mark. This decline suggests a weakening upward momentum, which could be a warning sign for investors.
Bearish Signals on Daily Charts
The daily chart paints a more bearish picture for Bitcoin. The sharp reversal from the expanding channel resistance, coupled with negative readings in both the standard (12, 26, 9) and longer-term (50, 100, 9) MACD histograms, indicates that the path of least resistance is, unfortunately, downward.
The longer-duration MACD histogram, which employs 50- and 100-day EMAs and a 9-day EMA to smooth the signal, is less sensitive than the default setting but serves as a better filter for short-term market noise. Taken together, both monthly and daily charts suggest that Bitcoin could drop to sub-$100K levels, testing the lower end of the expanding triangle.
Potential Support Levels
As Bitcoin approaches these lower levels, the 200-day simple moving average at $107,000 could provide some much-needed support. However, bulls will need to engineer a break above $121,800 to invalidate this series of lower highs and alter the current bearish outlook.
At press time, Bitcoin is trading at approximately $114,800 according to CoinDesk data. Investors should remain vigilant and consider these technical indicators when planning their next moves in the ever-changing cryptocurrency landscape.
What Lies Ahead for Bitcoin?
The question on every investor’s mind is: what does the future hold for Bitcoin? While it is difficult to predict with certainty, the repeated failures to maintain gains above the trendline suggest caution. Investors should also keep an eye on various factors, including market sentiment, regulatory news, and technological advancements that could influence Bitcoin’s trajectory in the coming weeks and months.
For those looking to dive deeper into the world of cryptocurrencies, consider exploring options such as how to buy Bitcoin, or check out our reviews of popular exchanges like Kraken and Binance.
Conclusion: Exercise Caution and Stay Informed
The cryptocurrency market is notoriously volatile, and while the potential for gains is high, so is the risk of losses. As Bitcoin struggles with resistance and bearish signals, it is crucial for investors to stay informed and adapt their strategies accordingly. Whether you are a seasoned trader or a newcomer, understanding the underlying trends will be key to navigating this ever-evolving landscape.
In summary, Bitcoin may be facing significant resistance around the $121,800 mark, and a drop to $100,000 or lower could be on the horizon. Investors are advised to keep a close watch on technical indicators and market trends to make informed decisions.
Meta Description: Discover the latest analysis on Bitcoin’s price trajectory as it faces resistance near $121,800. Will BTC drop to $100K? Explore expert insights, technical indicators, and market trends in this in-depth analysis. Stay informed and navigate the crypto landscape effectively!
