Bitcoin price extended its downward move after breaching a highly bearish continuation setup. The latest crash followed the FOMC conference, and experts attribute the sell-off to long-term investors that bought Bitcoin last year and 2022.
BTC Looking for Steady Foothold
Bitcoin’s price actions printed a bearish continuation formation known as the bear flag. The setup comprises colossal plummets accompanied by consolidation. Breaking out from the coil up often sees the asset continuing its plummets.
Bitcoin’s 52% declines to $32,837 from ATH od $69,000 formed a flag pole. The stagnation phase that had Bitcoin forming multiple higher lows and higher highs within an ascending parallel channel created a flag.
Experts determine the technical setup’s formation by adding the flag pole height to BTC’s breakout level. ON 22 April, Bitcoin cracked the flag’s bottom trend line near $40,032, predicting $21,584 as the target.
The after-FOMC plunge also saw Bitcoin losing the crucial support level at $36,271, showing bears in control of the market. The crypto invalidated the foothold on a weekly chart, supporting the impending crash.
Meanwhile, the situation worsened overnight as Bitcoin crashed to hit the psychological level of $30,000. Though it recovered to $32,000, Bitcoin remains weak and vulnerable to declines.
While writing this content, BTC traded around $32,246.56, down 3.55% over the past day. Meanwhile, the triple top pattern created between May 2021 and July 2021 increases the possibility of market makers dragging BTC beneath $29,000 to gather sell-stops.
If sellers continue dominating, Bitcoin will plunge to explore the $21,584 target from $29,000.
The 365-day MVRV supports BTC’s bearish picture. This index tracks average loss/profits by investors that bought Bitcoin within the previous year.
A negative reading means these individuals are underwater, while a positive one suggests profits for the holders. The later condition increases the sell-off probability, meaning investors don’t accumulate amid positive MVRV values.
Snatiment’s analysts pointed to the -10% – -15% as a lucrative accumulation spot as near-term holders (at a loss) are likely to sell at massively discounted prices. Experts dub the zone opportunity territory as long-term investors buy here.
For now, the MVRV metric hovers near the -25% local support. Historical data shows the figure might dip to -40%, matching the March 2020 bottom. Though BTC attempts recovery, enthusiasts should beware of steep retracement chances, corresponding with the pessimistic technical viewpoint.
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