After losing $6,000 in 3 days, here is Bitcoin’s next major support

Bitcoin has plummeted over the past few days, giving back almost all of its gains over the past week. In fact, Bitcoin lost over $6,000 in 3 days.

There is one positive sign for the bulls, however: Despite the fear and uncertainty in the market, the divergence between long-term (accumulate) and short-term (issue losses) holders is larger than the 50% pullback seen in May 2021.

Technical Analysis

daily chart

As mentioned in our previous analysis, the price was strongly rejected by both the 100-day moving average and the $45,000 resistance.

BTC also broke below the 50-day moving average, reigniting fears in the market. However, there is still a chance that the price could climb back above this moving average in the next few days. If so, we could see another attempt towards a rally from $45,000.

On the other hand, if BTC fails to recover in the next few days, the next support will be the $36,000 region, where the bulls were heavily defended last Thursday, the day Russia invaded Ukraine.

BTC/USDT daily chart | Source: TradingView

4 hour chart

On the 4-hour timeframe, the uptrend is showing weakness as a strong rally was slightly rejected by the $45,000 resistance.

The RSI also indicated that the price was “overbought” with levels above 70 at the time.

In addition, a bearish divergence on the RSI has also been spotted by this oscillator, which suggests the possibility of a correction in the near term. Currently, the RSI is entering the oversold territory on the 4-hour timeframe, which suggests that a short-term bottom might be reached.

The price also seems to be forming a bear flag continuation pattern and a break of the support line could cause more pain with a target of $30,000. This pattern will be invalidated if the price breaks out and closes above the resistance line.

BTC/USDT 4 hour chart | Source: TradingView

onchain analysis

The chart below shows the development of Spent Output Age Bands (SOAB) since October 2020.

SOAB uses color to indicate the last generated UTXO age (Unspent Output). This indicator combines the behavior of long-term and short-term investors.

As can be seen, there is more activity in the early stages of the bull cycle in Q1 2021, which means higher demand. Comparing the fall from $65,000 to $29,000 in May 2021 and the recent fall from $69,000 to $33,000 (January 2022), one can observe that long-term investors took profits in May 2021.

Currently, the majority of market activity comes from retail traders selling their coins under psychological pressure while long-term holders hold and accumulate.

Source: CryptoQuant

You can see the BTC price here.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

SN_Nour

According to Cryptopotato

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