Analyst Josh of Crypto World took to his latest analysis and said that Bitcoin is currently facing rejection from a critical resistance area, prompting another test of a key support level. This pattern is also observed in Ethereum, which is rejecting an important Fibonacci level.
Recent Price Movements: On the 4-day Bitcoin chart, the Super Trend indicator provides details into recent price movements. Despite Bitcoin’s price dipping below $56,000, the 4-day candle closed above this level. This closure has, for now, avoided a bearish reversal signal on this timeframe.
The critical level to watch remains just under $56,000. If the next 4-day candle closes below this threshold, it would confirm a bearish reversal, flipping the indicator from green to red. Historically, such reversals have marked the beginning of prolonged bearish trends.
Daily Bitcoin Chart and Bullish Divergence
Current Price Action: On the daily Bitcoin chart, after a short-term bounce, the price is now retesting support between $56,500 and $57,500. A confirmed bullish divergence on the daily timeframe suggests either sideways consolidation or slight bullish relief in the short term.
Critical Support Levels: However, a confirmed daily candle close below $56,500 would invalidate this bullish divergence and signal further bearish action. It’s crucial for Bitcoin to maintain support above this level to avoid a prolonged downturn. Earlier today, the price dipped below $55,500. If the price once again loses $56k support levels, the analyst’s prediction of bearish trend might come true.
Liquidation Heat Map: The analyst also noted that over the past day, Bitcoin cleared a lot of upside liquidity. He mentioned that there was liquidity starting just above $57,000 up to around $57,500, which was mostly wiped out. There’s still a major area of liquidity between $58,800 and $58,900, just below $59,000. He suggested that Bitcoin might reach close to $59,000 soon to clear out this remaining liquidity.
Also Read : Crypto Market Analysis: Bitcoin, Ethereum, and Altcoins Show Gains!
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