The Bitcoin price finally made a move and fireworks are sure to follow

This week, Bitcoin (BTC) raised investors’ hopes and then left them high and dry again.

Traders placed most of their attention on the BTC price pushing through a long-term descending trendline resistance, but according to Cointelegraph analyst Ray Salmond, “BTC price simply consolidated its way through the trendline by trading in a sideways fashion where the price has been the interval between $18,500 and $24,500 for the last 114 days.”

At the time of writing, BTC’s price continues to struggle at $20,000 and it is uncertain whether the level will hold as support or not.

Data from chain analysis firm Whalemap shows the three price zones investors should focus on.

Whalemap told Cointelegraph, “So far, the $20,380 resistance – that’s due to a whale accumulation of ~20,200 BTC – has been working pretty well, with the latest rejection almost exactly to the dollar.”

Whalemap elaborated:

“Our support is unchanged since the drop from $30,000. It stands at $19,174 and was formed way back on June 18, 2022, from a staggering accumulation of ~101,300 BTC of whale wallets. There is also resistance above $20,380, at $21,543. But first we need to at least break above $20,380.”

From the perspective of technical analysis, on the daily time frame, the Bollinger bands have narrowed, BTC futures open interest reached a near-record high above 604,000, and price is trading outside long-term trendline resistance – all of which are signs that a directional move is about to begin is done.

Related: So, what if the Bitcoin price continues to fall? Here’s why it’s time to start paying attention

As shown in the chart below, investors’ risk appetite continues to wane, and it should come as no surprise that risky assets are the first to see outflows and are ignored by investors during a bear market.

While BTC and Ether (ETH) prices have ignored the recent volatility seen in equity markets, US Federal Reserve policy and the potential for another wave of strong equity market selling could trigger the next leg down for the cryptocurrency market.

What’s Next for Bitcoin?

Currently, Bitcoin and the broader crypto market are essentially in a zone where a number of bullish and bearish factors can determine the next direction of the trend.

As noted by Delphi Digital, Bitcoin is currently following the path of previous market cycles.

Zooming in closer, we can see what Delphi Digital characterizes as “eerie similarities to the 2018 cycle.”

There are a handful of Bitcoin, crypto market and stock values ​​showing congruence and supporting the possibility of a relief rally in the near term, but overall the overall trend favors the downside. If stocks see some relief and move higher, the tight correlation between BTC, Ether and the stock markets would suggest a similar style of price action in crypto.

That said, a Bitcoin relief rally is likely to be capped at $27,500, where the 200-day moving average lies. The most encouraging short-term actions from Bitcoin would be either a continuation in the same range, holding $20,000 and $18,400 as support, or a high volume breakout that clears the current 116-day range with a series of daily bars above the area high of $25,200.

A possible twist of the 200-MA to support and a series of weekly higher highs on the candlestick chart would be early signs of a possible long-term bullish reversal, but this seems highly unlikely given the macro headwinds facing Bitcoin.

This newsletter was written by Big Smokey, the author of The Humble Pontificator Substack and resident newsletter writer at Cointelegraph. Every Friday, Big Smokey will write market insights, trending how-tos, analysis and early research on potential new trends within the crypto market.