Bitcoin price experienced strong resistance around $21,000 after rising more than 28% in the past 14 days. Over the past 24 hours, over $26.6 million has been liquidated in the Bitcoin market, and more coins have been observed leaving centralized exchanges. Market analysts believe that the bitcoin market is preparing to enter a correction phase after a massive rally over the past few weeks. Additionally, memecoins led by Shiba Inu and Dogecoin have begun to rise, which is seen as the end of the cryptocurrency cycle.
However, all attention is focused on the pennant symmetrical triangle formed on the lower time interval. Any strong breakout on either trendline of the pennant will be used to extrapolate the next leg. For example, if Bitcoin price rebounds above $21,500 and has a solid daily line, traders will see this as a price continuation.
On the other hand, if Bitcoin prices close below $21k in the next few days, crypto traders will opt for a correction in progress.
However, short-term traders should be aware Blinking can stop hunting in any direction. Additionally, the cryptocurrency market has high volatility even on shorter time frames.
From the perspective of the RSI indicator on smaller time frames, Bitcoin price may be preparing to reverse at current levels. It is worth noting that while the Bitcoin pennant is in an uptrend, the RSI indicates an overbought and descending divergence.
However, on-chain data suggests that Bitcoin price is responding to open futures markets recording high liquidations over the past few weeks. Additionally, once FTX officials dump $5 billion in digital assets, cryptocurrency selling pressure could increase significantly.
The recent rally in BTC and ETH USD has led to significant overall futures leverage decline.
The ratio between futures open interest and token reserves held by exchanges has dropped to between 25% and 30% as many traders close their positions (or get liquidated). pic.twitter.com/Bccu6vs86G
— glassnode (@glassnode) January 18, 2023
Elena R
Elena is an expert in technical analysis and risk management of the cryptocurrency market. She has more than 10 years of writing experience – as such, she is an avid journalist with a passion for researching new insights into the crypto space.
