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Active Currencies 14431
Market Cap $2,643,284,494,005.80
Bitcoin Share 50.07%
24h Market Cap Change $-1.24

Bitcoin’s revisit to this area would be a good shorting opportunity

2min Read
Bitcoin showed more pain in store on the charts after a 25% drop in the past 36 hours

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Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

Bitcoin [BTC] dropped to a low of $20.8k in the hours preceding press time. This was a level that Bitcoin last traded at eighteen months ago. The global crypto market capitalization stood at $928 billion, and over the past two days of trading, crypto lost its status as a trillion-dollar market. However, the pain for investors might not have ended, and new lows could yet be set.

BTC- 1 Hour Chart

Bitcoin showed more pain in store on the charts after a 25% drop in the past 36 hours

Source: BTC/USDT on TradingView

Bitcoin could be a great buying opportunity at $20k, but the short-term market structure was strongly bearish. A drop of 25% for Bitcoin within 36 hours is quite uncommon, and sometimes it does see BTC form a local bottom and grind its way higher.

The Fibonacci levels plotted (pale yellow) were based on the move from $31.5k to $24.9k, and the 61.8% extension level was almost perfectly tested as a support level. The $23k area acted as support for a brief period of time but was overwhelmed by the selling pressure. It could be revisited in the hours to come and could form a hidden bearish divergence shortly. Its confluence with the 23.6% extension level presents this area as stiff resistance and could offer a shorting opportunity.

Rationale

Bitcoin showed more pain in store on the charts after a 25% drop in the past 36 hours

Source: BTC/USDT on TradingView

In white is highlighted a bullish divergence, which saw BTC pullback from the $20.8k mark. However, a hidden bearish divergence (orange) could also present itself soon. Hidden divergences signal the continuation of the former trend, and therefore the downtrend could continue and push BTC lower.

The Awesome Oscillator (AO) was also well below the zero line to show strong bearish momentum, while the OBV also saw a sharp dip southward. Hence, sellers have the upper hand by a large margin.

Conclusion

Sellers have been dominant, and a revisit to the $23k area would likely be a shorting opportunity for Bitcoin. The break southwards comes after a month of consolidation within a range, and the $20k mark could be visited once again.

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Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
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