How deep can this correction go when BTC falls below $66,000?

After an impulsive rally, Bitcoin lost its bullish momentum upon reaching the $70,000 threshold, indicating the presence of sellers in the market.

However, given that the price is above the crucial 100-day MA, a continuation of the short-term consolidation stage seems possible before the next move is initiated.

Technical Analysis

By Shayan

The daily chart

A detailed analysis of Bitcoin’s daily chart reveals that after decisively breaking above the 100-day moving average of $64.4k, the price continued its upward momentum towards the crucial and psychological resistance zone of 70k dollars

However, upon reaching there, the cryptocurrency lost its momentum, indicating a potential increase in selling pressure. However, as long as the price is above the 100- and 200-day MAs, the overall market condition remains bullish, with buyers looking to mark a new ATH in the coming days.

If BTC breaks below the 100-day MA in the near future, this will indicate a noticeable bearish trend, possibly leading to a drop towards the $60,000 pivot. Overall, Bitcoin is expected to continue its short-term sideways consolidation, eventually receiving support and starting a new bullish move.

Source: TradingView The 4-hour chart

On the 4-hour chart, after an impulsive rally initiated from the crucial $55,000 support region, Bitcoin broke through several key resistance levels, including $60,000 and $65,000. However, as the chart demonstrates, the price faced increased selling pressure by reaching the upper boundary of the descending wedge at $68,000, leading to fading bullish momentum and weaker price action.

Upon reaching the upper threshold of the wedge, the cryptocurrency formed an ascending wedge pattern, consolidating between the boundaries of the pattern.

The formation of this pattern, along with a bearish divergence between the price and the RSI indicator, indicates a possible near-term bearish reversal, with the price pulling back towards the crucial $65,000 support region. This bearish scenario is only valid if BTC breaks below the lower boundary of the ascending wedge first.

However, if buyers eventually manage to break the upper boundary of the wedge and recover the substantial $70,000 resistance, an impulsive rally will become imminent, which could liquidate numerous short positions.

Source: TradingView chain analysis

By Shayan

Understanding Bitcoin futures market metrics can be a great addition to price analysis. This chart highlights Taker’s buy/sell ratio, which measures whether buyers or sellers are more aggressive in executing their orders as a whole.

As the chart shows, after a slight rejection of the $70,000 price area, a substantial volume of sell orders has been executed in the futures market, making Taker’s buy/sell ratio fall below one. This suggests that futures traders are anticipating a further fall in the price of Bitcoin in the near term, raising expectations for an extended consolidation phase with possible minor pullbacks.

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