Bitcoin's price shows a very low intent to recover following the recent drop last week. Things are not looking positive in the short term. Technical
Bitcoin’s price shows a very low intent to recover following the recent drop last week. Things are not looking positive in the short term.On the daily chart, the price has been consolidating inside a tight range over the last few days, following a massive drop from the $30K critical resistance zone. The 200-day moving average has also been broken to the downside, which is a clear bearish trend signal.
Yet, considering the oversold signal demonstrated by the RSI, the price will probably retrace higher in the short term. A retest of the 200-day moving average is highly likely, and if the price fails to climb above it, a deeper decline could be expected in the coming weeks with a potential drop back towards the key $20K support level.Looking at the 4-hour timeframe, it is evident that the price has been ranging between the $27,500 and the $25,000 levels over the last few days.
However, judging by the overall market structure, a further bearish continuation would be highly probable if the $25K level fails to hold.Bitcoin’s price recently experienced a crash after failing to break above the key $30K area. There is a fear that the bear market is far from its end. The following chart represents the short-term holder spent output profit ratio metric with a 40-day exponential moving average applied. It indicates the ratio of profitability of short-term spent outputs . Values above 1 indicate that the short-term investors are selling at a profit, while values below 1 demonstrate losses being realized by them.
As the chart illustrates, this metric has dropped back below 1 after more than six months. This signal indicates that the short-term holders are selling their coins at a loss, which is a behavior usually witnessed in bear markets. However, things might change if the metric quickly recovers above one, making the recent drop a bear trap.
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