BTC price is gradually approaching $18,500, a crucial resistance. However, bitcoin’s current rise is likely to be followed by a fall towards $12,500. Check out this analysis.
Bitcoin falls 2% at the open of the week
The crypto leader started the week down 2%. Buyers are trying to bring its price back above $20,000. The fallout from FTX’s fall is still wreaking havoc, which is a major headwind for the bulls. Indeed, fear still reigns in the crypto market, according to the “ Fear & Greed Index “. The indicator actually points to 27. However, optimists will see this as an improvement from last month when the score was 21. In any case, until it becomes “ neutral », we can say that it is the sellers who remain in control.
Nevertheless, the effort of the bulls should not be overlooked. This allowed Bitcoin to recover 9%, after falling 24% during the week “ FTX special “. However, it would still be too early to label this bullish impulse as “ bull run “. Indeed, there are still major hurdles to overcome. Among these hurdles are the $18,500 zone and the $20,000 psychological zone. As long as these resistances have not been breached, the price structure of Bitcoin remains bearish.
Crucial resistances to watch out for
To hope for a bullish rally for 2023, the upward pressure will have to break through these two resistances. Indeed, these two obstacles line up with key levels of the Fibonacci retracement. The $18,500 zone aligns with the 50% level. While the $20,000 psychological zone lies slightly below the 78.6% level. Thus, investors should consider further downside for Bitcoin. Moreover, the scenario before the 24% drop seems to be repeating itself.
As can be seen on this H4 chart, BTC is still in a bearish structure. Before the fall in November, the price of this crypto entered two phases. The first phase is a range phase. Then, the price begins a false breakout of the range to the top. After that, bitcoin suffers a drop, accompanied by a large volume.
It seems like the current evolution of the price of BTC is nothing but a reproduction of this scenario. However, one could look for a slight upside towards the $18,500 resistance before the next drop towards $12,500.
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