Bitcoin (BTC) Technical Analysis: Bitcoin Bulls Trying to Defend $3,500 Support, What Can We Expect Next?
Today the crypto market has been shaken by yet another sharp bearish decline, as the global crypto capital drops by $6 Billion and BTC slides by a further $100. Increased skepticism over Bitcoin’s short-term prospects are having a huge impact across the entire market and we still have yet to see any significant bullishness return since the November crash last year.
Despite a seeming lack of trading confidence in the #1 cryptocurrency, the Bitcoin network and mainstream adoption of BTC is still continuing to gain huge traction across the world. Weiss Ratings recently released a report that outlined 5 areas where this could be seen:
-Fees have dropped considerably since 2018, now down to around $0.25.
-The Bitcoin Lightning Network can now handle over $2.4 Million of transactions off-chain.
-Active addresses has seen a marked increase.
-BTC trading volume has doubled since the post-2017 crash.
-Bitcoin hashing rate is up at around all-time high levels as more miners commit computing power to process transactions on the Bitcoin blockchain.
Will the price of BTC realign with the increasing value of its underlying network soon, or will fearful and uncertain traders continue to drive Bitcoin towards new lows?
On the 1D BTC/USD chart we can see that the recent ramped up selling pressure has forced BTC back on to a downtrending support in the last 24hrs. This particular level has been a crucial foothold for bullish traders since November last year, and has propped up Bitcoin’s price from further decline on 5 individual occasions.
If bears are able to successfully break this critical support then it is possible that $3,000 could be the next short-term target for BTC. Although we are seeing an increase in bullish momentum arrive to defend this level, there a number of 1D indicators are foreshadow a bearish continuation:
-Bearish divergence between the 12 and 26 moving averages on the MACD indicator, with selling candles on the histogram.
-RSI indicator line is plummeting toward the oversold region as buying momentum dwindles.
-Parabolic SAR dots holding above the price action.
- $3,400 (-2.66% from current value at $3,493)
- $3,280 (-6.10%)