Bitcoin (BTC) price has slipped below a 25-day inclined trendline serving as support level. While BTC has knocked on this barrier several times in the past three weeks, momentum and on-chain indicators support an incoming crash.
Bitcoin Price Wearkness Could Lead to Crash
Bitcoin price has been conoslidating with a positive slope between two inclining trend lines. The same can be seen in the below chart. Recently, BTC slid below this key barrier after a failed attempt at overcoming the $100,000 psychological level. This outlook signals a spike in bearish momentum and could extend the ongoing drop.
Further supporting this drop is the 365-day Market Value to Realized Value (MVRV) ratio indicator that hovers around 36.59%, suggesting that nearly 36% of all investors that bought BTC a year ago are in-the-money. These unrealized gains are dangerous and could trigger a correction if investors decide to book profits.
The Network Realized/Profit & Loss (NPL) indicator shows massive upticks after Bitcoin price attempted to break the $100K for the second time. This uptick indicates that many investors actively booked profits, which adds a headwind to the uptrend and is likely one of the many reasons why BTC is sliding lower.
Bitcoin Technical Analysis: BTC’s 6% Crash Likely
In addition to the value of BTC sliding below the key trend line, the Relative Strength Index (RSI) has slipped below the 50 mean level. This drop indicates that the momentum is shifting from bullish to bearish. This sentiment is echoed by Awesome Oscillator (AO) by receding red histograms above the zero line. A drop below the mean level will most likely trigger a spike in selling pressure and further crash Bitcoin price lower.
The $94,875 is first support area, breaching which could knock Bitcoin price down to $92,514. This move would constitute a 6% crash from the current price of $98.065.
On the other hand, if Bitcoin price bounces off the inclined support trend line, it would denote a resurgence of buying pressure. In such a case, BTC needs to overcome the $100K hurdle into a stable support level with a decisive weekly candlestick close above it. In such a case, BTC could attempt to climb higher and tag new ATH at $111,800.
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