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Bitcoin Rollercoaster Continues But is $26K Retest Coming? (BTC Price Analysis)

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Overall, Bitcoin is forming a widening wedge pattern, a common technical pattern in the currency markets. The price touched the upper trendline twice at $65K and $69K.

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On the other hand, the collapse of the LUNA-UST ecosystem seems to have acted as a catalyst for the current bearish momentum, which saw the price of Bitcoin drop to $26K, touching the lower trendline for the third time.

Technical analysis

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By Shayan

Daily chart

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The lower wedge trendline has been a major support level for Bitcoin over the last cycle and is expected to support the price as it did in May 2021. rebound from the lower trend line.

However, if the trend line fails to hold the price, the next Bitcoin support levels will be around $24,000 and $20,000 in demand regions.

Source: Trading View

4 hour chart

Bitcoin has entered a range phase, making equal highs. On the other hand, the cryptocurrency jumped and registered a higher price action pattern (yellow pointer), wiping out all remaining liquidity above, which can be interpreted as a clear bull trap.

BTC is expected to remain in this dismal range between $29K and $32K over the medium term, with significant volatility due to the liquidation of the futures market.

At the same time, the cryptocurrency moved inside the descending channel and deviated from the upper trend line. In the event of a break above the specified range and the upper trend line of the channel, a bullish rally will be inevitable. In this case, $37k would be a significant resistance level.

chartbtc_2
Source: Trading View

On-chain analysis

By Shayan

As shown in the chart, during the consolidation phases, the market often removes all retailers’ buy/sell stops in the futures market, resulting in massive liquidations in both directions.

Bitcoin set up a high pattern (Yellow pointer), a clear bull trap, followed by a market correction that liquidated many long positions. Moreover, the same picture is visible right now. There has been significant volatility in the market over the past three days, resulting in a large number of liquidations of long positions.

When the market goes through extreme volatility and enters a period of consolidation, these moves are inevitable. During these stages of the market, risk management is essential.

chartbtc_2
Source: Trading View
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Disclaimer: The information found on Cryptooshalais the property of the cited authors. It does not represent CryptoPotato’s opinion on whether to buy, sell or hold any investment. You are advised to do 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.






Credit : cryptopotato.com

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