Looking at certain indicators gives an indication of a potential Bitcoin price drop. Bitcoin (BTC) price hovers around the $23,000 range as high volatility shrouded the cryptocurrency in the last few days. After opening the week at well above the $24,000 mark, Bitcoin is now trading in the range of $23,000. Meanwhile, recent trading activity of short term investors signals at a possible further reduction in BTC price.
Bitcoin Price Drop Imminent In Near Future?
Due to the selling trend from short term investors, it appears that there is a possibility of a price drop. The same is reflecting in technical indicators. While Bitcoin has formed a rising wedge pattern, the outlook is however negative for the asset. According to CryptoQuant analysis, there is a negative divergence in RSI and MACD oscillators below the resistance line.
“Below the resistance line, we see a negative divergence in RSI and MACD oscillators. These can be a pre-signal of the possibility of wedge breakdown.”
Similarly, another indicator, the Spent Output Profit Ratio (SOPR) is indicating a potential price drop with a clear downward trend. “SOPR of short-term investors has reached level 1 in a downward trend.” The SOPR is calculated as a ratio of the realized value in USD and the value at creation of a spent output. A downtrend in SOPR often reflects a selling environment among investors to protect from potential losses.
Next Support Level
Meanwhile, Bitcoin (BTC) price has hardly deviated from the $23,200 level on Saturday. As of writing, Bitcoin price stands at $23,199.95, up 0.79% in the last 24 hours, according to CoinMarketCap. On a weekly basis, the top cryptocurrency took a plunge by 5.33%. There is a slow down in the upside momentum for Bitcoin price. Analysis indicated that if BTC fails to hold on to the current price range, it could fall back to a support of $22,600. If BTC manages to reach the support price, the next support could be at around $22,200.