Bitcoin Shows Bearish Signs, Risk of Breakdown Below $56K
Bitcoin failed again to clear the $58,500 resistance against the US Dollar. BTC is declining and it might accelerate lower below the $56,000 support in the near term.
Bitcoin is struggling to move above the $58,000 and $58,500 levels.
The price is just trading above $57,000 and the 100 hourly simple moving average.
There was a break below a key bullish trend line with support near $57,200 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair could accelerate lower if there is a clear break below the $56,000 support zone.
Bitcoin Price is Struggling
Bitcoin price failed to gain pace above the $58,500 resistance zone. BTC is slowly moving lower from the last swing high at $58,890. There was a break below the $58,000 level.
The price traded below the 23.6% Fib retracement level of the upward move from the $53,300 swing low to $58,890 high. Besides, there was a break below a key bullish trend line with support near $57,200 on the hourly chart of the BTC/USD pair.
Bitcoin is now just trading above $57,000 and the 100 hourly simple moving average. An immediate resistance on the upside is near the $57,500 level. The first major resistance is near the $58,000 level.
The main resistance is still near the $58,500 level. A clear break above the $58,500 resistance zone could open the doors for more upsides. The next key resistance is near the $60,000 level, above which the price could rise steadily. The next stop for the bulls may possibly be near the $61,200 level.
Fresh Drop In BTC?
If bitcoin fails to clear the $58,000 resistance zone, it could start a fresh decline. An immediate support on the downside is near the $57,000 level. The first major support is now forming near the $56,800 level and the 100 hourly SMA.
The next major support is near the $56,000 level. It is near the 50% Fib retracement level of the upward move from the $53,300 swing low to $58,890 high. A downside break below the $56,000 support may perhaps push the price towards $55,500. Any more losses might start a major decline towards $52,000.
Technical indicators:
Hourly MACD – The MACD is now gaining pace in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently below the 50 level.
Major Support Levels – $57,000, followed by $56,000.
Major Resistance Levels – $58,000, $58,500 and $60,000.
Bitcoin Bearish Signal: Exchange Reserves Show Sharp Increase
Bitcoin exchange reserves have shown a sudden sharp spike recently, despite being in a declining trend for months.
After Months Of Downtrend, Bitcoin Exchange Reserves Shoot Up
As pointed out by a CryptoQuant post, on-chain data shows that BTC exchange reserves have spiked up in the past couple of weeks.
The “all exchanges reserve” is an indicator that measures the total amount of Bitcoin stored in wallets of all exchanges at a particular point in time.
If the value of the metric goes down, it means investors are taking their coins off exchanges. Holders may be withdrawing their BTC to accumulate them as they might believe that the price would appreciate further. As a result, this trend could be bullish for the crypto.
On the other hand, if the indicator increases in value, it implies holders are transferring their Bitcoin to exchanges, possibly for withdrawing to fiat or for purchasing altcoins. Such a trend can prove to be bearish for the coin.
Related Reading | Bitcoin Open Interest Remains Elevated Post Dramatic Dip
Now, here is a chart that shows the trend in the BTC exchange reserves over the past few months:
The indicator seems to have spiked up recently | Source: CryptoQuant
As you can see in the above graph, the Bitcoin exchange reserves have been falling down for a while now. However, in the past couple of days, the indicator’s value has shown a sudden increase.
This rise in the reserve amounts to around 39k BTC being deposited to exchanges between yesterday and today alone.
Related Reading | The Bitcoin Saga: A Look At BTC’s History Of Up’s And Down’s
Such sharp trend is usually an indication of whale activity. The price of Bitcoin has struggled recently so it’s possible some institutional investors could be preparing to pull out from the market.
If it’s indeed a sign of whale dumping, then the outlook of the crypto’s price could be bearish at least in the near future.
BTC Price
At the time of writing, Bitcoin’s price floats around $56.4k, down 2% in the last seven days. Over the past month, the crypto has lost 8% in value.
The below chart shows the trend in the price of the coin over the last five days.
BTC’s price has mostly consolidated in the past few days | Source: BTCUSD on TradingView
Over a week ago, Bitcoin had a crash triggered by fud from the Omicron COVID variant. The coin’s price dropped to as low as $53k, but a few days ago the coin recovered its losses.
However, since then, the crypto has mostly trended sideways. It’s unclear at the moment which direction the coin might break out of this consolidation, but if the exchange reserve is anything to go by, BTC might face bearish trend soon.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com
The Crypto Daily – Movers and Shakers – December 4th, 2021
Daily Video Tech Analysis of Bitcoin, Ethereum, Litecoin, and Ripple’s XRP
Bitcoin, BTC to USD, slid by 5.01% on Friday. Following a 1.26% loss on Thursday, Bitcoin ended the day at $53,687.
After mixed morning, Bitcoin rose to an early afternoon intraday high $57,599 before hitting reverse. Coming up against the first major resistance level at $57,324, Bitcoin slid to a late intraday low $51,333.
The extended sell-off saw Bitcoin fall through the day’s major support levels and the 23.6% FIB of $53,628.
Finding late support, however, Bitcoin broke back through the third major support level at $53,487 and the 23.6% FIB to end the day at $53,600 levels.
The near-term bullish trend remained intact, in spite of the latest pullback to $51,000 levels. For the bears, Bitcoin would need a sustained fall through the 62% FIB of $28,814 to form a near-term bearish trend.
The Rest of the Pack
Across the rest of the majors, it was a bearish day on Friday.
Cardano’s ADA slid by 9.47% to lead the way down, with Ethereum (-6.59%) and Litecoin (-7.52%) in the deep red.
Bitcoin Cash SV (-4.65%), Binance Coin (-3.96%), Chainlink (-5.07%), Crypto.com Coin (-4.77%), and Ripple’s XRP (-5.14%) also struggled, while Polkadot slipped by just 0.66%.
In the current week, the crypto total market rose to a Wednesday high $2,712bn before sliding to a Friday low $2,329bn. At the time of writing, the total market cap stood at $2,438bn.
Bitcoin’s dominance rose to a Monday high 43.01% before falling to a Friday low 41.07%. At the time of writing, Bitcoin’s dominance stood at 41.69%.
This Morning
At the time of writing, Bitcoin was up by 0.22% to $53,805. A bullish start to the day saw Bitcoin rise from an early morning low $53,567 to a high $53,823.
Bitcoin left the major support and resistance levels untested early on.
Elsewhere, it was a mixed start to the day.
Bitcoin Cash SV (+0.11%) and Litecoin (+0.20%) joined Bitcoin in positive territory early on.
It was a bearish start for the rest of the majors, however.
Story continues
At the time of writing, Crypto.com Coin was down by 4.17% to lead the way down.
For the Bitcoin Day Ahead
Bitcoin would need to move through the $54,206 pivot to bring the first major resistance level at $57,080 into play. Support from the broader market would be needed, however, for Bitcoin to break back through to $57,000 levels.
Barring an extended crypto rally, the first major resistance level and Friday’s high $57,599 would likely cap the upside.
In the event of an extended rally, Bitcoin could test resistance at $60,000 levels before easing back. The second major resistance level sits at $60,472. Bitcoin would need plenty of support, however, to breakout from $58,500 levels.
Failure to move through the $54,206 pivot would bring the 23.6% FIB of $53,628 and the first major support level at $50,814 into play. Barring another extended sell-off on the day, Bitcoin should steer clear of sub-$49,000 levels. The second major support level sits at $47,940.
This article was originally posted on FX Empire
More From FXEMPIRE: