Bitcoin vulnerable to the sell-off as technical and on-chain indicators turn bearish – Confluence Detector
|- Bitcoin recovered from the recent low but failed to break $24,000.
- Technical indicators imply that the price is vulnerable to further losses.
Bitcoin (BTC) is hovering at around $23,000. The pioneer digital currency recovered from the recent low of $21,900 and bumped into a brick wall of sell orders on approach to $24,000. A failure to clear the resistance pushed the price back into a red zone.
Sell signals start piling up
From a technical point of view, BTC is vulnerable to decline further. An evening star candlestick formation, a harbinger of a trend reversal, transpired on the 3-day chart. This model usually consists of three candles: a large green candlestick, a Doji or a small-body candle, and a red candle. All three ingredients are in place, meaning that BTC might be in for a deeper decline.
BTC, 3-day chart
Also, the TD Sequential indicator produced a sell signal in the form of a nine green candlestick on the same timeframe. If this pattern is confirmed, BTC may extend the correction towards the local bearish target of $21,800. This barrier is created by 38.2% Fibo retracement weekly and the Pivot Point 1-day Support 1. If it gives way, the sell-off gains traction, BTC may re-test $20,600 (61.8% Fibo retracement weekly) and $19,400. This area served as strong resistance at the beginning of December. Now it can be verified as support.
BTC, confluence levels
On the upside, the first local barrier comes at $23,500 in the form of 61.8% Fibo retracement daily, which also coincides with the highest level of the previous four hours. A sustainable move above this area is needed for the upside to gain traction. The next focus is on the psychological $24,000 reinforced by the upper line of the 4-hour Bollinger Band and the Pivot Point 1-day Resistance 1.
BTC whales flee the network
Bitcoin's Holders'Distribution data shows that over 50 participants holding from 1,000 to 10,000 BTC worth $23 million to $230 million left the network since the beginning of the week. This significant outflow may translate into an increased bearish pressure and lead to a massive BTC sell-off.
BTC, Holders distribution
The activity of large coin holders, also known as whales, often serves as a leading indicator for the price movements.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.