Bitcoin is currently facing rejection at a critical resistance level after hundreds of millions of trades were liquidated. This pattern mirrors past trends and suggests that Bitcoin may continue to behave similarly in the short term. At the time of writing, XRP has slipped below two crucial levels – $60,000 and $59,000.
According to analyst Josh from Crypto World, the 4-day Bitcoin chart has not changed much, but the 2-day chart shows a bearish trend with lower highs and lower lows. This pattern has formed a descending widening wedge, with support at around $54,000 and resistance at $68,000-$69,000. Even within a bearish trend, there can be temporary bullish relief, as evidenced by recent price action.
The following will happen in the short term:
In the short term, Bitcoin is repeating patterns from past market cycles, including the March 2020 crash. The expert points out that while Bitcoin has been trending bearish on longer time frames, similar patterns from the past suggest that we could see a short-term bounce within the next day or two. However, the overall trend remains bearish, so long positions should be carefully managed.
The daily RSI (Relative Strength Index) has reset to neutral levels after a significant drop last week, meaning there is room for further downside. The analyst warns that while the RSI alone is not enough to confirm a trend reversal, it does suggest that the market is not yet oversold, leaving room for potential short-term declines.
Support and resistance levels:
Support levels to watch are around $57,500, with a more significant zone between $56,000 and $57,000. A break below these levels could push Bitcoin towards the $51,000-$53,000 range. However, if Bitcoin rises above $63,000, resistance at around $67,000-$68,300 will be crucial for any sustained uptrend.
The liquidation heatmap shows liquidity just above $58,000, suggesting a potential drop to this level before a possible short-term bounce. While this is not guaranteed, the analyst considers this a likely scenario based on current market conditions.
