Bitcoin May Retest $20,000 Zone Before It Drops To $18,000 Level

Christian Encila

2 years ago

3 mins read

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Fear has gripped investors and traders alike in light of the recent adverse market action. Bitcoin, the most well-known cryptocurrency, has suffered the highest levels of selling pressure since the crisis in June and July.

With a high of $22,400 on September 13 and a low of $18,790 today, Bitcoin has fallen by nearly 8%. The price has dropped by a stunning 13.31 percent.

This, too, can be explained by the unfavorable economic developments in the United States, as have the recent price fluctuations. As of this writing, the latest sell-off has not lost any of its steam.

Price information from the last few days places Bitcoin between $19,344 and $18,346. Financial market participants should not place any stock in these figures.

Source: TradingView.com

Bitcoin Needs To Crawl Back Up

Bitcoin’s attempt at a comeback resulted in the formation of a double triangle, which is harmonically related to the XABCD pattern.

This pattern may point to a reversal in which buyers can get in at a discount and sellers can make a profit. However, this was not the situation.

Bitcoin may retest the $20,000 crucial territory before if retreats to the $18,000 level.

BTC is selling at a significant discount to the 78.60 Fib level right now. Being so far away from the important psychological threshold of $20,000, this price point may hinder any further rebound.

Investor confidence can only continue to rise with the aforementioned price in place.

A turnaround can only occur if bulls step in to buy the ongoing decline and turn around the bearish trend.

Bitcoin’s price may be able to retest the $20,500 resistance level if the aforementioned hypothetical event occurs. The 61.80 Fib level is where the aforementioned resistance is located.

However, Bitcoin’s correlation with the broader financial landscape is not advantageous. Bitcoin’s close correlation with the S&P 500 and NASDAQ indexes makes it difficult to restore upward momentum.

BTC Needs All Energy It Can Muster To Normalize

Bitcoin’s rebound is in peril as the larger financial sector experiences a steep decline. In fact, it may not even hit the $20,500 resistance mentioned.

According to the renowned cryptoanalyst @woonomics, Bitcoin has not yet reached rock bottom. As he evaluated the past and present performance of Bitcoin, he discovered that only 52 percent of all coins are underwater.

Bitcoin’s previous bottoms were 61 percent, 67 percent, and 57 percent. The data he gave indicates that if Bitcoin were to reach rock bottom once more, it would not be at $18,000.

For Bitcoin to emerge from this predicament, the larger financial sector must rebound from the current collapse in order to restore investor and trader confidence.

As of this writing, the Stoch RSI values are converging, which may provide a modest boost to the price.

However, with present market dynamics following a strong downward trend, recovery is unlikely.

BTC total market cap at $359 billion on the daily chart | Source: TradingView.com

Featured image Pixabay, Chart: TradingView.com

(The analysis represents the author's personal views and should not be construed as investment advice).

Christian Encila

They say journalists never truly clock out. But for Christian, that's not just a metaphor, it's a lifestyle. By day, he navigates the ever-shifting tides of the cryptocurrency market, wielding words like a seasoned editor and crafting articles that decipher the jargon for the masses. When the PC goes on hibernate mode, however, his pursuits take a more mechanical (and sometimes philosophical) turn.

Christian's journey with the written word began long before the age of Bitcoin. In the hallowed halls of academia, he honed his craft as a feature writer for his college paper. This early love for storytelling paved the way for a successful stint as an editor at a data engineering firm, where his first-month essay win funded a months-long supply of doggie and kitty treats – a testament to his dedication to his furry companions (more on that later).

Christian then roamed the world of journalism, working at newspapers in Canada and even South Korea. He finally settled down at a local news giant in his hometown in the Philippines for a decade, becoming a total news junkie. But then, something new caught his eye: cryptocurrency. It was like a treasure hunt mixed with storytelling - right up his alley!

So, he landed a killer gig at NewsBTC, where he's one of the go-to guys for all things crypto. He breaks down this confusing stuff into bite-sized pieces, making it easy for anyone to understand (he salutes his management team for teaching him this skill).

Think Christian's all work and no play? Not a chance! When he's not at his computer, you'll find him indulging his passion for motorbikes. A true gearhead, Christian loves tinkering with his bike and savoring the joy of the open road on his 320-cc Yamaha R3. Once a speed demon who hit 120mph (a feat he vowed never to repeat), he now prefers leisurely rides along the coast, enjoying the wind in his thinning hair.

Speaking of chill, Christian's got a crew of furry friends waiting for him at home. Two cats and a dog. He swears cats are way smarter than dogs (sorry, Grizzly), but he adores them all anyway. Apparently, watching his pets just chillin’ helps him analyze and write meticulously formatted articles even better.

Here's the thing about this guy: He works a lot, but he keeps himself fueled by enough coffee to make it through the day - and some seriously delicious (Filipino) food. He says a delectable meal is the secret ingredient to a killer article. And after a long day of crypto crusading, he unwinds with some rum (mixed with milk) while watching slapstick movies.

Looking ahead, Christian sees a bright future with NewsBTC. He says he sees himself privileged to be part of an awesome organization, sharing his expertise and passion with a community he values, and fellow editors - and bosses - he deeply respects.

So, the next time you tread into the world of cryptocurrency, remember the man behind the words – the crypto crusader, the grease monkey, and the feline philosopher, all rolled into one.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.