Bitcoin: Should You Be Bullish After the Losses of the Last Two Weeks?
Disclaimer: The information presented does not constitute financial, investment, trading or other types of advice and is solely the opinion of the author.
- The structure was positive on the daily time frame.
- Loss of 12% in less than two weeks highlighted bearish strength.
Analysts comparing the on-chain calculations of Bitcoin in 2023 with that of the 2018-2019 cycle found that Bitcoin could have formed its long-term bottom in January. Investors with a long time horizon may be rewarded later this year.
Read Bitcoins [BTC] Price prediction 2023-24
Analysis of the price action showed that although there was significant selling pressure recently, bulls have continued strength in the market. The confluence of support in the $21.6k-$22k range underscored the possibility of a price pullback across the market.
The bullish breaker from September was retested
Source: BTC/USDT on TradingView
From June to November, Bitcoin traded within a range extending from $18.9k to $24.2k. The midpoint of this range was $21.6k and was previously tested as support in mid-February. The price has dropped to this region again after a rejection of $25.2k.
Although the king of crypto was able to break the range, the bulls were unable to defend their gains. This showed strong profit tendencies across the market, and also highlighted the importance of $24.8k-$25.2k as resistance.
The structure on the daily chart showed a series of higher lows, marked by the purple trendline support. While lower timeframe momentum was strongly bearish (lower lows since February 23), the retest of the bullish breaker from September could be decisive.
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Invalidating the bullish idea would be a descent back below the $21.6k mark. A daily closed session would break the structure and turn the bias to bearish.
OBV dropped to a new low in 2023, although prices are much higher. This supported the idea that selling pressure was dominant and the rally was coming to an end. The RSI showed weak bullish momentum in late February and recently dropped below the neutral 50 mark to hand the reins to the bears.
There were signs of accumulation, but holders continued to take profits
Source: Sentiment
The 90-day average coin age was on the rise, showing BTC accumulation across the network. The last time this happened was in October. The metric started falling before prices did, and a similar move in the coming weeks could be an early sign of selling Bitcoin.
The dormant circulation showed noticeable peaks since early December, highlighting how fear dominated the market.
The 90-day MVRV ratio dipped south but remained positive, indicating that profit taking may not be over yet.
