After closing above $30,000 in the week before, Bitcoin witnessed aggressive profit-booking last week, which resulted in a 9% pullback. Several major altcoins have also witnessed strong moves lower, unnerving retail investors.
Glassnode data shows that shortterm holders, who have been owning Bitcoin for less than 155 days, have been sending coins to the exchanges at a loss since April 16. That could be because some believe the crypto recovery is over and Bitcoin could retreat below $25,000 and even retest $20,000.
However, long-term investors are unfazed by the recent correction and are already looking at the upcoming halving in 2024.
We said in our previous analysis that if the 20-day exponential moving average (EMA) gives way, Bitcoin could plunge to $26,500 and it came close to this level. The BTC/USD pair dropped to $26,965 on April 24. The 20-day EMA has started to turn down and the relative strength index (RSI) is in the negative territory, indicating that bears have the upper hand.
Buyers have managed to defend the 50-day simple moving average (SMA) for the past few days but the weak rebound shows a lack of demand at higher levels. The bears will try to capitalize on this situation and yank the price below the 50-day SMA. If they manage to do that, the pair could plummet to the neckline of the inverse head and shoulders (H&S) pattern at $25,000.
This level is likely to attract aggressive buying because a break below it may invalidate the bullish setup and trap the buyers. On the upside, the 20-day EMA is the resistance that needs to be crossed for the momentum to pick up and the pair to resume its northward journey.
Lastly please check out the advancement’s happening in the cryptocurrency world.
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