A bearish engulfing candle on Bitcoin’s daily chart is a negative development, but one analyst says BTC price is fine above $88,000.
Bitcoin’s BTC$97,604 price exhibited a bearish engulfing pattern on the daily chart for the first time since Oct. 21, retesting its support at $95,000 before descending lower.
While Bitcoin’s long-term market structure remains unchanged, one analyst underlined key price levels for Bitcoin that need to be observed over the next few days.
Bitcoin “in good shape” above $88,000
Cointelegraph reported that total crypto liquidation surpassed $1.6 billion on Dec. 9, its largest event since 2021, with $142 million in Bitcoin long positions wiped out.
Despite a significant leverage flush, Rafael Schultze-Kraft, co-founder of GlassNode, indicated that Bitcoin remains in “good shape” above $88,000.
The data scientist explained that $96,000 remains a key level for Bitcoin since the $96,000-$98,000 range was a dominant zone of investor interest. However, Schultze-Kraft added,
“However, what’s striking is the large gap in accumulated supply below $88k. There’s minimal support in this range, with the next major accumulation zone visible only at $70k an below.”
Similarly, Axel Adler Jr, a Bitcoin researcher, highlighted that the realized capitalization of new investors holding BTC has risen from $48 billion to $343 billion since the start of the cycle. It means that the selling pressure discharged by long-term terms has been consistently absorbed by newer entrants regularly.
Bitcoin hidden bullish divergence on 1-day chart
On the one-day chart, Bitcoin fights to hold the $95,000 support. From a positive outlook, a hidden bullish divergence was observed between Bitcoin’s price and the relative strength index (RSI).
A hidden bullish divergence may indicate that the market momentum is strengthening, and the price could continue on an uptrend.
Similarly, Daan Crypto, an independent crypto trader, said it looks “so far so good” for Bitcoin. The analyst expected sideways chop to cover the liquidity wick, which was formed between $94,000-$92,000, and said,
“The leverage was flushed out, likely to see them outperform again once the market stabilizes a bit and $BTC starts trending back up.”
With key futures market metrics such as aggregated open interest, funding rate, and spot volume undergoing a deleverage or reset, the probability of a massive crash is minimal right now as long as BTC maintains a daily position above $90,000. If BTC drops down to $90,000, that will be a 13.5% drawdown from BTC’s recent all-time high at $104,600, which is an acceptable price reaction that doesn’t trigger a strong trend reversal.
Source: Cointelegraph
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