- Bitcoin price grapples with the 200-week SMA at $25,111, which coincides with the three-day resistance level, making this confluence a make-or-break scenario.
- The MRI shows the development of a premature sell signal on the weekly chart, indicating the potential for a quick pullback or a full-blown reversal.
- Invalidation of the bullish thesis will occur if BTC produces a lower low below $20,800.
Bitcoin price shows a clear struggle near a crucial psychological level on the weekly and three-day chart. While a flip of this hurdle could lead to an explosive move, a failure could result in undoing the year-to-date (YTD) rally.
Also read: Could Bitcoin price rally to $34,000 and crash by 38% by the second half of 2023? Analyst says yes
Bitcoin price is at a crossroads
Bitcoin price has rallied 48% YTD as it currently auctions at $24,873. There have been multiple attempts on the daily timeframe to overcome the $25,000 confluence-backed psychological resistance.
In addition to being a psychological level, the Momentum Reversal Indicator (MRI) suggests the presence of a resistance level at $25,207 on the weekly chart. And the three-day chart’s MRI reveals a breakout line present at $25,424. To make matters worse, this level also coincides with the 200-week Simple Moving Average (SMA) at $25,111.
Therefore, the range from $25,000 to $25,400 is a key resistance confluence zone that needs to be overcome for a bullish continuation. Assuming this barrier is flipped into a support level by a spike in buying pressure, the next level that Bitcoin price will retest is the $30,000 psychological level.
BTC/USDT 1-week, 3-day charts
While things are looking on the fence for Bitcoin price, investors need to be cautious in opening any swing positions. With the way things are right now, BTC could sway either way. However, a firm rejection at the $25,000 psychological level followed by massive profit-taking could skew the odds in the bears favor.
If such a development leads to a three-day or a weekly candlestick close below $20,800, it would create a lower low and invalidate the bullish thesis. This situation could further trigger panic selling and plummet Bitcoin price to $16,671 and even the $15,000 level.
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