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At the same time, the dominance of Bitcoin continues to increase and has already exceeded 42%. However, we do not see any significant reason that could affect the market. Moreover, the trading volume remains low at $30 billion per day.
Let’s take a closer look at the Bitcoin chart and try to figure out what is happening on it:
For the last 4 days, the price has been clamped in the $41,500 – $44,000 range. This indicates a significant volatility decrease. In addition, as we’ve said earlier, the trading volumes remain low. Taken together, this indicates that most of the participants are now out of the market and are waiting for new patterns and news. Most likely, this was influenced by the large volume of liquidations during last week, which amounted to about $3 billion. All this points to high uncertainty on the market.
However, a strong support area has formed on the chart in the $40,000 – $41,000 range. From this very range the price has bounced 4 times in the last 7 days. This indicates a large limit belt around these levels, which will be difficult to break. In addition, this area is an important psychological level for market participants. Therefore, it is the key support level.
The chart itself has a downtrend structure. But at the same time, its price formed a large “falling wedge” on the daily timeframe. This formation is a reversal. However, it is not yet fully formed and strong movements can occur.
An important point is a fact that Bitcoin has already moved down to the 200-day moving average line. It usually acts as strong support for the chart. In most cases, after the price touches this line, the chart shows a significant increase.
Many indicators have also dropped significantly and have been moving around the oversold zone for a long time. However, they have no discrepancies with the chart at the current moment. In the medium term, this indicates a possible rise in Bitcoin price.
The situation on the market is very uncertain after several drops that took place last week. We expect to see another decline by 10% – 15% to the lower border of the wedge with a sharp rebound upward. If this happens, there is a high probability of a price reversal in the next few weeks.