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$20K incoming retest for bitcoin? (BTC Price Analysis)

Bitcoin has typically experienced two phases in each cycle; A bull market is when the price rises and records a new all-time high, followed by a bear market when the price experiences a significant decline.

Technical analysis

by Shayan

Weekly chart

Historically, at the end of each bear market, after experiencing a +80% correction, the price briefly touched the 200-week moving average as Bitcoin attempted to find a long-term bottom and begin its next bullish rally.

Notably, during the recent significant shakeout, the price fell below this resulting moving average and returned to the breakout level at around $24K. If the pullback pattern holds, it can be taken as a validation for another leg to the $16K level. Conversely, if the cryptocurrency succeeds in breaching the moving average, a rebound to the $27K resistance level is highly anticipated.

Source: TradingView

4-hour chart

After experiencing a bearish extension rally, the price formed a well-known classic pattern called a flag. After testing the lower edge along with the $19K support level, the price has finally started a short-term rally and tried to break the upper boundary. However, BTC failed to overtake the threshold above the flag and is falling slightly.

Source: TradingView

Nevertheless, a clear double-top price action pattern (notable reversal pattern) can be determined on Bitcoin’s 4-hour timeframe chart. Considering that, BTC is likely to experience another shakeout to retest $19K. If the critical support level of $19K fails to hold the price, the next destination will be the $16K mark. On the other hand, there is a high expectation for price to use the existing disequilibrium/market inefficiencies at around $22K to initiate its next major rally towards significant resistance at $27K.

On-chain analysis

By: Edris

Bitcoin Short Term Holder SOPR

Bitcoin has been bouncing off the $20K support area in the past few weeks after realizing massive losses from various groups of market participants.

The recent uptrend led to some profit-taking by short-term holders, who bought bitcoin at $20K or less in the past two months. This behavior is displayed in SOPR chart of short holders with SOPR values ​​above 1 for the first time since March 2022.

Previous profit-taking periods in the current bearish trend were mostly by smart money who took advantage of the exit liquidity available after a short rally. Their selling pressure has led to the initiation of a new bearish pattern. Therefore, their current behavior is no different, and if these profit margins increase over the next few weeks, they could act as a catalyst for another bearish continuation in the short term.

Source: CryptoQuant
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Disclaimer: The information found on CryptoPotato is that of the referenced writer. It does not represent the opinions of CryptoPotato to buy, sell or hold any investments. It is advisable to conduct your own research before making any investment decisions. Use the information provided at your own risk. See disclaimer for more information.

Cryptocurrency Charts by TradingView.

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