Bitcoin price has seen strong resistance around $21k after rising more than 28 percent in the last 14 days. Over $26.60 million has been liquidated on the Bitcoin market over the past 24 hours and more coins have been observed leaving centralized exchanges. Market analysts believe that the Bitcoin market is preparing to enter a correction phase after posting significant gains in recent weeks. Additionally, meme coins, led by Shiba Inu and Dogecoin, have started to rally, which is seen as the end of a crypto cycle.
However, all attention is focused on the symmetrical triangle of the pennant that is formed in the lower time intervals. Any strong break in any of the pennant triangle trend lines will be used to extrapolate to the next phase. For example, if the price of Bitcoin rises beyond $21,500 and has a strong daily bar, traders will take it as a price continuation.
On the other hand, if the Bitcoin price closes the next few days below $21k, cryptocurrency traders will pick a correction in the works.
However, short-term traders should watch out for long daily winks that can stop hunts in either direction. Furthermore, the cryptocurrency market is attributed to high volatility even on smaller time frames.
From an RSI indicator standpoint on the smaller time frames, the Bitcoin price could be preparing to reverse to current levels. In particular, while the Bitcoin pennant flag is bullish, the RSI indicates overbought and downward divergence.
However, on-chain data indicates that the Bitcoin price is responding to the open futures market which has seen high sell-offs in recent weeks. Furthermore, the selling pressure for crypto could increase significantly once FTX officials dump the $5 billion digital assets.
The ratio of futures open interest to coin reserves held on the exchange has fallen by 25-30% as many traders closed positions (or were liquidated). pic.twitter.com/Bccu6vs86G
– glass node (@glassnode) January 18, 2023
This post Bitcoin Price Lacks Momentum To Break Above $21,500 – Is It A Bear Trap? Here is the close up analysis
was published first on https://coinpedia.org/bitcoin/bitcoin-price-lacks-momentum-to-rally-beyond-21500-is-it-a-bear-trap-here-is-up-close-analysis/