Bitcoin’s value notably fell during the previous day’s close, hitting the intraday low of $23,000, leading to a loss of more than 3%. The decline was followed by a significant decline in US markets, with the Dow Jones Industrial Average falling 390 points and the S&P500 and Nasdaq 1.6% and 2.0% respectively.
The price had been hovering around the crucial $23,800 support level for a long time, and thus giant action was expected regardless of direction. One of the main reasons is believed to be the release of monthly personal consumption expenditure, which rose 0.6%, beating forecasts of 0.3%, fueling high inflation.
So what’s the next step? Will Bitcoin drop below $22,000 or regain its strength above $25,000?
The current trading setup displays the possibilities of a successful bullish trap, but the possibility of a bullish reversal still looms.
The price of BTC is trading in the rising wedge, and the recent pullback has taken the price towards the lower support. The price is believed to hover around these levels for some time and rebound above $25,000. However, this bullish attempt is likely to fail and hence massive bearish action could drag the price below $21,500.
Moreover, the RSI has maintained its trend in the upper bands and despite a bearish outlook, it is showing a bullish divergence. Therefore, Bitcoin (BTC) price is likely to stay above $23,000 until the bulls build up some strength to trigger a bounce towards the crucial resistance at $23,800. Clearing these levels can start with a nice rally towards the main target set at $25,000.