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Bitcoin price analysis (BTC): will this wedge support remain?

The bitcoin formed lower peaks and slightly lower lows to create a sagging wedge formation in its 4 hour time frame. Support is valid for now, but it seems that bears are trying to take a lower break.

The 100 SMA is less than 200 longer-term SMAs to confirm that the path of least resistance is downward. In other words, the selloff is likely to resume rather than the other way around. Furthermore, the gap between moving averages is widening to reflect greater selling pressure. The price is lower than both the moving averages to signal the presence of sales pressure.

RSI has already plunged into the oversold region to report the sell-out of sellers and appears to be coming back to indicate that buyers could come back. In this case, the bitcoin could still rebound support and re-test the top of the wedge in the $ 3,800 area. This aligns with the 200 SMA dynamic inflection point to add to its force like a ceiling.

The Stochastic has just reached the oversold region to reflect the slower selling pressure and may even be on the rise soon. A low bullish divergence can be seen as the price has made the lows lower while the oscillator has had a slightly higher minimum since mid-January.

However, a break under the support could stimulate a slide that has the same dimensions as the wedge formation. This covers $ 3,600 to about $ 4,400 so the resulting downtrend could last at least $ 800. Similarly a break above the top of the wedge could stimulate a rally of the same height.

Bitcoin had a rough couple of weeks as traders seemed to turn their optimism to a level. So as it is, the industry still has to report positive developments that could support rallies from the start of the year, but the lack of bullish interest, despite upward encroachments, suggests caution.

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