Bitcoin Retreats To Key Support, BTC Bears Have A Fighting Chance?

Since last week, Bitcoin has lost the critical support that kept the price above $24,000. BTC bears may find their chance to delay what was supposed to be the “end of the bear market” and the taw of the crypto winter, according to several experts.  

Bitcoin has lost the momentum that drove the price to a yearly high; with a price decline, bulls will have to stop the drop in the Bitcoin price action to avoid continuing the fall in the price and prevent a collapse to lower levels.

Bitcoin Bears Have The Upper Hand?

As seen in the chart below, by the research and data analysis firm Material Scientist, the support that held the price above $24,000 has been completely wiped out. Bitcoin has formed a new support floor at the $23,400 level. A resistance wall has now been included in Bitcoin’s range since February 15th at $24,400. 

BTC whales have been continuously buying in the order books, as shown in the chart above, and positions between $1,000-$10K. On the other hand, retail investors have been selling Bitcoin and have contributed with BTC testing newly formed support. 

According to a recent post published by market-leading research and data analysis firm Bitfinex Alpha, the Bitcoin price action caught market investors off guard, resulting in $155 million worth of short liquidation, which caused the BTC price to move to higher levels. Bitfinex added:

BTC hit an eight-month high in the last seven days, touching $25,000. Massive short liquidations fueled the move. While we failed to close a daily candle above this massive psychological and technical level, this is another significant step forward for the asset as we continue to see out what we believe are the latter stages of a gruesome bear market.

According to Bitfinex’s research, this type of price action, where longs and shorts are wiped out simultaneously, has historically resulted in a range formation. In addition, the most likely move for BTC is to partially liquidate positions and wait for the range to form without a strong directional bias. 

In addition, BTC bulls can hope for a range formation without further price declines. With a strong bid wall forming at the $23,400 level, Bitcoin can absorb the selling pressure, creating a new fundamental support level. 

BTC is trading at $23,600, down 3.1% in the last 24 hours. In the seven-day time frame, Bitcoin is still in the green with a gain of 6.5%. Over the past 30 days, BTC’s gains have slowed significantly, with a slight 4% profit. 

If Bitcoin fails to hold the next support, it could drop to the $20,000 zone, which could be a win for the BTC bears in the near term, as future rate hikes could be more aggressive in the upcoming Federal Reserve (FED) meeting, causing a further downtrend. 

Featured image from Unsplash, chart from TradingView.