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The Bitcoin price dropped slightly over the last 24 hours to trade at $39,946.60 at press time as investors struggle to boost BTC to above $40,000.
The Bitcoin Price Could Drop In The Next Few Days
Daily chart for BTC/USDT (Source: TradingView)
On Bitcoin’s daily trading chart, a significant bearish configuration, known as a technical flag, is on the brink of activation. This impending signal is highlighted by the current trajectory of the 20-day Exponential Moving Average (EMA), which is observed to be descending towards the 50-day EMA. Such a movement is indicative of a shift in momentum, suggesting that over the recent span of 20 days, Bitcoin’s price dynamics have skewed more negatively when contrasted with its performance over a broader 50-day period. This pattern of the shorter-term EMA falling towards the longer-term EMA is often interpreted as a bearish signal by market analysts.
Historically, a notable instance of these two EMAs crossing in a bearish manner was recorded on August 16, 2023. This event was closely followed by a notable depreciation in the Bitcoin price, where it plummeted from a peak of $29,259.85 down to $25,166 in the subsequent days. Such occurrences underline the potential market impact when these moving averages intersect in a manner that suggests a bearish turn.
Major Bearish Flag to Keep an Eye On
The looming possibility of these two EMAs intersecting again within the next 48 hours is raising concerns among investors and traders alike, as it could be indicative of Bitcoin entering a bearish market phase. Should this bearish crossover materialize, it might exert downward pressure on Bitcoin’s price, potentially undermining the current support level at $40,000. A breach below this critical threshold could expose Bitcoin to further losses, with the next significant support pegged at $38,000. If this level fails to hold, the descent might continue, potentially driving Bitcoin’s price down to a lower boundary of $35,390 in the ensuing period.
Contrastingly, this bearish narrative could be challenged and rendered moot if Bitcoin demonstrates resilience by closing above the $40,000 mark in the upcoming two daily candle sessions. Achieving this could signal strength and stability in Bitcoin’s price, possibly leading to a period of consolidation. This consolidation phase could serve as a precursor to a more bullish momentum, where Bitcoin might gear up to test the resistance at $42,450. A successful breach of this resistance could open the floodgates for a more pronounced upward movement, potentially propelling Bitcoin towards a higher resistance level set at $44,430. Such a scenario would not only invalidate the bearish outlook but could also instill a renewed sense of optimism among investors regarding Bitcoin’s short-term price trajectory.
The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Ecoinimist is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
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