Bitcoin (BTC) – Could be on the verge of an outlook deteriorationPosted on Sunday, August 21 2022 at 8:51 pm GMT+0000
Bitcoin (BTC) has faded dramatically last week after piercing through the 20- and 50-day exponential moving averages, but the bottom line of the ascending channel pulled from June lows managed to stall the sell-off for now.
Technically, the sharp decline degraded the quality of the gentle uptrend from June lows and a drop below the aforementioned trendline will further dampen the medium-term outlook. Failure of the 20-day exponential moving average to jump over the 50-day moving average is promoting further bearish actions.
Additionally, momentum oscillators are mirroring the recent increase in negative impetus, as the ROC is hovering well below the zero mark, the Awesome Oscillator just nudged into the bearish region while the stochastic dived into the oversold waters.
In the event the price tumbles below the supportive trendline overlapping with the 20,700 barrier, that being the July 26th low, the bears will instantly challenge the July 17th low of 18,900 ahead of the June bottom of 17,600.
However, some recovery would be normal following Friday’s sharp sell-off, and the lower bar of the channel can still act as an ideal place for a rebound, specifically following the recent bullish intersection between the stochastics in the oversold region.
Yet for traders to resume buying appetite, a decisive close above the moving averages is needed. Such a move will trigger an immediate visit of the 24,700 – 25,200 zone linking the most recent highs. A sustainable move higher and more importantly beyond the return line of the channel will boost buyers’ confidence towards the 28,000 area. Further higher, the rally will accelerate towards the 31,200 – 32,400 congested region.
Summarizing, Bitcoin is on the verge of an outlook deterioration as the price is testing the bottom of the upward sloping channel. A decisive step below 20,700 is expected to trigger the next bearish action, while a fast rally above the moving averages is required to bring buyers into play.