BTC is giving bearish signals
Bitcoin’s current technical analysis suggests a bearish trend as it breaks through the ascending upport line that has been present on the chart since the start of the year. This break may indicate a significant drawdown of BTC prices in the near future.
There are three factors that support the assertion that Bitcoin has been bearish since reaching its high of $25,250 on February 25th.
Firstly, the BTC rate temporarily deviated above the $23,800 resistance area, which is often a signal of a bearish trend reversal. Secondly, strong bearish divergence signals were evident on the daily RSI before the price rejection occurred.
Currently, the RSI is below 50, which is also a bearish sign. Finally, BTC made a bearish breakout of the ascending support line that has been on the chart since the beginning of the year. This may indicate that the growth phase has come to an end.
If the decline in BTC prices continues, the nearest support level will be around the $20,850 area, which is the Fibo level 0.5 retracement and horizontal support. This is the most probable scenario.
However, if there is a price recovery above the $23,800 resistance, the bearish outlook for BTC will be cancelled, and the currency may head towards higher levels around $27,000.
Overall, the technical analysis suggests that BTC is giving bearish signals, and a decline in prices towards the $20,850 support area is the most likely outcome. Nevertheless, a price recovery above $23,800 may lead to higher highs for BTC
Source: TradingView BTCD index stumbles over resistance
BTCD index stumbles over resistance
The BTCD Bitcoin Dominance Index is currently experiencing some difficulties with resistance levels.
After a bullish break out of an ascending parallel channel on January 17th, the index hit a high of 44.79%, but encountered a significant obstacle in the form of the 0.618 Fib resistance level.
As a result, it bounced off this level and has been declining ever since. At present, the BTCD index is barely holding onto the channel resistance line.
If there is a rebound of BTCD and a breakdown of the Fibo level of 0.618, there may be an increase in the index to 48.50%. However, if there is a rollback inside the channel, the most likely forecast will be a fall to the channel support line by 41%.
It is worth noting that there is an almost perfect correlation (light blue) between the BTCD and BTC rates.
This means that the growth of one implies the growth of the other, and vice versa. Therefore, the forecast for the fall of BTCD confirms the bearish scenario for Bitcoin.
Source: TradingView BTCD index stumbles over resistance
Therefore, it seems that BTC is likely to experience a downward trend towards the support area of $20,850. If the currency manages to close above $23,800, it could invalidate the bearish forecast and potentially surge towards $27,000.