Is $20K Inbound for Bitcoin Following an 8% Weekly Decline? (BTC Price Analysis)

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Bitcoin’s price appears to be preparing for another bearish move after a lengthy period of consolidation between the $20K and $24K levels. With the current price action, a new low is not out of the picture.

Technical Analysis

By: Edris

The Daily Chart

Looking at the daily chart, the price has been consolidating at a very tight range over the last few days. This occurred after a rejection from the $24K level and the 100-day moving average. The price has also broken below the 50-day moving average located at the $22K area and has failed to break back above it. The $17K-$20K support area seems like the next target for the price.

If the market breaks below the previous low around the $18K mark, another rapid drop towards the $15K area and even lower could be expected.

Alternately, if the price breaks the 50-day and the 100-day moving averages to the upside in the next few days, a rally towards $30K would become more likely. However, the bearish scenario seems more probable at the moment.

Source: TradingView

The 4-Hour Chart

On the 4-hour timeframe, the price is still consolidating at the lower boundary of the large bearish flag. A new smaller bearish flag has been forming over the last week. As a result, a breakdown and continuation below the large flag appear likely to occur in the next few days. In this case, the price could aggressively drop towards the $18K level.

The RSI indicator has recovered from the oversold area recently and is bouncing around the 50 level, indicating that the momentum is in a state of equilibrium right now. However, it could be the calm before the storm as the chart seems very bearish in the short term.

btc_chart_260802
Source: TradingView

Onchain Analysis

By Shayan

During a bearish market, big players usually offload their assets during the correction phases or when the market experiences a short-term relief rally. The market was experiencing a rally towards the $24K level. Therefore, it provided an excellent chance for the whales to liquidate assets before potentially experiencing another leg down.

The Exchange Whale Ratio metric’s 30-day exponential moving average is a proper tool for monitoring Whales’ activity and it has climbed significantly over the past few weeks. This suggests a considerable increase in Bitcoin deposits to exchanges by whales. This selling pressure and rise in supply have been the leading cause for the recent significant drop in Bitcoin’s price.

onchain_btc_2608
Source: CryptoQuant
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Cryptocurrency charts by TradingView.

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