Bitcoin (BTC) – Odds remain on the bears side despite the recent price stabilization

Bitcoin (BTC) – Odds remain on the bears side despite the recent price stabilization

Posted on Sunday, October 16 2022 at 9:05 pm GMT+0000

Bitcoin (BTC) continues to tiptoe across the 19,000 zone, after failing to step into the $20,000 area following an impressive 10% short squeeze bull run. The short squeeze was catalyzed last Thursday, after the crypto-king fell 10% in less than 4 hours upon releasing the U.S. September CPI data that came in higher than expected.

The hostile move that many analysts described as a wild roller-coaster drive, was not enough to spur a remarkable portion of market volatility which dried up in an exceptional manner lately, forcing a notable squeeze in the Bollinger bands. Further supporting that view, is the ATR indicator which plunged to a fresh 2-year low.

Bitcoin has been adopting a muted demeanor for almost one month now, while hovering marginally above the 18,100 support. The unusual neutral behavior is mirrored by the oscillators which are displaying weak messages in directional impetus. Both the KST and IMI have been following a horizontal path in the vicinity of their equilibrium levels.

However, as long as the price remains locked below the 20-day simple moving average, another visit of the 18,100 – 17,600 zone molded by the September and June lows, will remain the most likely scenario. The bears will need to produce significant pressure to snap that base. If efforts prove successful, the price will plunge towards the 16,200 taken from the late November 2020 low and the 15,000 psychological level respectively. Further lower, the sell-off could speed up towards the August 2020 peak at around 12,500.

Otherwise, following an unexpected improvement in market sentiments, the bulls will jump over the 20-day simple moving average to challenge the 20,500 – 20,700 zone fortified by the upper-Bollinger band. By conquering those barricades, they will then advance towards the mid-September high at 22,800, a breach of which will inject some optimism back in the market shifting the spotlight towards the summer top at 25,200.

In summary, the wild mid-week move did not introduce any changes to the medium-term outlook, and odds for a revisit of the 18,100 – 17,600 base remain elevated. A decisive close lower will boost selling appetite.