Bitcoin (BTC) – At risk of another steep sell-off

Bitcoin (BTC) – At risk of another steep sell-off

Posted on Thursday, December 15 2022 at 8:48 pm GMT+0000

Although Bitcoin (BTC) climbed to a fresh five-week high on Wednesday, it has been struggling to advance beyond the 55-day exponential moving average and the key 18,000 – 18,400 resistance band.

According to the technical picture, the recent cheerful recovery from a two-year low could be coming to an end. First, the crypto-king seems to have created a gravestone doji candlestick on Wednesday before rotating lower, which foresees a reversal in price direction, though additional red candlesticks will be needed to confirm that. Then, the RSI and the ROC reversed lower to meet their equilibrium lines, while the stochastic posted a bearish crossover on the edge of the overbought region before flipping lower, increasing the stakes for a downturn in the coming sessions.

Of note, although the negative tempo of the 20-day exponential moving average eased lately, the persistent negative bearing of the 55- and 100-day exponential moving averages is promoting the broad bearish picture.

If sellers resurface, and secure a decisive daily close below the 20-day exponential moving average, they may then strike a fresh attack on the 15,600 – 15,400 zone shaped by the November lows. Cracking that key floor will boost selling interest towards the 14,000 area, while a steeper decline could last until the 12,500 support barrier taken from August 2020 peak.

Otherwise, only a sustainable move above the key 18,000 – 18,400 congested area could restore buying appetite and diminish negative risks. In such a scenario, the bulls will initially target the 20,000 region, before turning their attention towards the early November peak at 21,500.

In brief, Bitcoin is at risk to switch back to the bearish side. A significant step below the 20-day exponential moving average could trigger the next bearish round, whilst a decisive close above 18,400 is required to boost the recent recovery.