Bitcoin Hanging By A Thread

Bitcoin futures are looking increasingly precarious for the bulls as price continues to languish below the 20,000 level and more recently finding another battleground price level around 16,000.

The crypto contract yesterday drifted modestly downward beyond what looked like a potential Bear Pennant pattern, i.e. a triangular consolidation period after a severe drop, which is often the precursor to another drop.

Meanwhile, momentum remains tilted toward the downside according to the Relative Strength Index while the directional trend to the downside is strengthening as indicated by the Average Directional Index. 

Some potential resistance could be found near the 21-day Exponential Moving Average which is trading near 17,700. To the downside, watch the yearly lows at 14,925 to see if /BTC can hold on.

Beyond that, it’s difficult to assess potential support areas as price hasn’t traded near current levels since 2020 – not to mention that the overall situation for crypto has dramatically changed since then. But the yearly Linear Regression Line (a line of best fit based on closing prices) suggests that “fair value” for bitcoin futures sits near 13,450, a roughly -16% drop.

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