The price action in Bitcoin has been trading around the key level of $4000 for around the last week and a half. Price action has traded both above and below but failed to break in either direction significantly.
Price is now consolidating just below the $4000 level around $3850. This is bearish behavior for price action as the longer it trades below $4000 without testing the level, the more likely price is to drop from here. The 2018 low is formed just below $3500, and a significant drop would likely return close to this low.
The MACD and the RSI are trading relatively flat in correspondence with the consolidating price action. The trading volume is also low. Although the price has managed to maintain above 2018 lows for around the past week, traders are likely cautious to push the price up from here and are also likely aware of resistance levels at $4000 and $4600.
The longer-term weekly timeframe is presenting an overall bearish outlook. After extremely bearish price action for two weeks which saw price move from $6400 to below $3500, it is now mostly sideways price action on the weekly. The longer this continues, the more likely a bear flag will execute where the next significant move is to the downside.
- Bitcoin consolidates below the key $4000 level.
- The longer Bitcoin consolidates around this level; the more likely the next move will be a significant one to the downside. 2018 lows are just below $3500 and a drop from here will have a strong chance of returning to this point.
- Bearish outlook also on the weekly with a potential bear flag being set up.
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