Bulls Make U-Turn as $50K Risks Resurface; Echoes of March 2020 Crash Loom

Bitcoin is currently facing rejection at a critical resistance level after liquidating hundreds of millions in trades. This pattern mirrors past trends, suggesting Bitcoin may continue to behave similarly in the short term. At the time of writing, XRP has slipped below two crucial levels–$60k and $59k.

According to analyst Josh of Crypto World, on the 4-day Bitcoin chart, not much has changed, but the 2-day chart indicates a bearish trend with lower highs and lows. This pattern has formed a descending broadening wedge, with support around $54,000 and resistance near $68,000 to $69,000. Even within a bearish trend, there can be temporary bullish relief, as seen in recent price movements.

Here’s What Will Happen In The Short Term:

In the short term, Bitcoin is repeating patterns from past market cycles, including the March 2020 crash. The expert notes that while Bitcoin is in a bearish trend on larger time frames, similar past patterns suggest we might see a short-term bounce within the next one to two days. However, the overall trend remains bearish, so any long positions should be managed carefully.

The daily RSI (Relative Strength Index) has reset to neutral levels after a significant decline last week, meaning there’s room for further downside movement. The analyst warns that while the RSI alone isn’t enough to confirm a trend reversal, it suggests that the market is not yet oversold, leaving room for potential short-term declines.

Support And Resistance Levels:

Support levels to watch are around $57,500, with a more significant zone between $56,000 and $57,000. A break below these levels could push Bitcoin toward the $51,000 to $53,000 range. However, if Bitcoin breaks above $63,000, resistance around $67,000 to $68,300 will be crucial for any sustained bullish trend.

The liquidation heat map shows liquidity just above $58,000, suggesting a possible dip to this level before a potential short-term bounce. While not guaranteed, the analyst considers this a likely scenario based on current market conditions.