Bitcoin price has been in a free-fall over the past few days after falling below the $30K support level. It is now found close to the critical point at $20K so it is important to see what the immediate lifeline will be if it fails.
The price even broke the $24K demand zone on a downside and is heading towards the $17K-$20K zone in a big way. This level could eventually sustain the price, as the RSI is also indicating that bitcoin is highly oversold (below 30).
So, a bullish rally or consolidation is likely to occur at the mentioned support. However, it may be too soon to call a bear market bottom as the price will need to retest the $30K resistance and the 50-day SMA before any bullish reversal can be forecast. Can you
4 hour chart
On the 4-hours time frame, it is clear that the price broke below the $24K demand area. Meanwhile, the price again declined the break above the $24K level before turning lower again.
The RSI indicator is also oversold on this time frame and may form a bullish divergence with the price, which points to a possible bullish rally in the near term. The $24K level will now act as a resistance that could reject the downside in case the price rebounds from the $20K area. Lower time frame price action should be closely watched over the next few days to determine whether a bullish return or another bearish continuation would be expected.
bitcoin capitalization model
Bitcoin price has fallen sharply towards the $20K area over the past few weeks, and the main question on everyone’s mind is where the downside will likely be. An analysis of past cycles can provide some valuable information.
This chart includes the 200-day MA, Market Cap, Realized Cap and Delta Cap. During the previous bear markets, there were cyclical bottoms between the DeltaCap and the RealizedCap (you can study these metrics on the Cryptoquant website).
The actual price is currently at $23K, and the delta price is around $16K, so the market has already entered a potential lower range. However, a bottom formation could take a year or more, given the current global macroeconomic and geopolitical situation, and even past Bitcoin cycles.
This lower accumulation phase will end when the market rises above the actual price again, and the bull run will begin when the price successfully breaks above the 200-day EMA (currently $40K).
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Cryptocurrency charts by TradingView.