Bitcoin price managed to regain its strength by consolidating above the important price of $20,000. This happened after BTC crashed to a low price of $17,600, however prices have recovered back to the current price of $21,300. This pushed the entire crypto market to also push back to support areas. Is the current Bitcoin consolidation a good thing? Will crypto prices recover back higher? Is the crypto crash over? In this article, we analyze Bitcoin prices from a technical perspective.
Bitcoin prices pulled a Fakeout below 20K
Bitcoin consolidated around the psychological price of $30,000 for almost 1 month. However, prices couldn’t pick up. When Bitcoin broke the $27,500 price lower, Bitcoin crashed to the next psychological price of $20,000. Many technical traders assess that if Bitcoin prices plunge below 20K, prices would reach 10K afterwards. However, this did not happen. Looking back at the daily technical chart in figure 1, we can see that Bitcoin broke $20,000 for 2 straight days before recovering back higher. This constitutes the perfect fakeout and not a breakout.
Is the Crypto Crash Over? Maybe
It all depends on the upcoming price-action of Bitcoin prices. We saw previously how a consolidation lower than $30,000 with no bulls in the market caused prices to crash lower. Today, we sit at a very important crossroad with two case scenarios at hand. Plotting the Fibonacci retracement from the high of $31,400 to the low of $17,900 will help determine what’s ahead.
Scenario #1: Bitcoin Crash to 10K
If Bitcoin prices consolidate slightly lower than 20K without pushing to the 50% retracement price of $24,600, a further decrease in prices should occur, leading BTC to reach a valuation of around $12,000. This takes into account
Scenario #2: Bitcoin Up to 28K
On the other hand, if Bitcoin prices happen to consolidate higher than 20K and manage to reach the 50% Fibonacci retracement, we can expect prices to rally up towards the previous support. In this case, the area delimited by $27,500 and $30,000 will turn into a strong resistance for prices. We will need a strong buying power to breach this area higher.
