Friday, February 3, 2023

Analyzing the Fallout: Where Will the Bitcoin Price Go After Last Week’s Block Size Drama?

Analyzing the Fallout: Where Will the Bitcoin Price Go After Last Week’s Block Size Drama?

The bitcoin price bubble that has lasted for over a month has finally ended. A large distribution of trading volume to the selling side started a downward movement, which may break every support until finally reaching a stabilization point at $600.

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Bitcoin Price Technical Analysis

Long-Term Analysis

bitcoin price technical analysis

Prices approached $1300 for a third time during this rally, but the bubble finally ended after another failure to break through the tough resistance.

From here, it is likely that every support will be broken on the way down to $600, where the price will stabilize. Once the markets even out, we should see a bounce back to $850.

This projection comes from the main technical channel that started in 2013. Still active, the technical channel suggests that this bearish correction is necessary before the upward trend restarts and brings back a smooth, rising average.

Mid-Term Analysis

bitcoin price technical analysis

A “Head and Shoulders” formation has added to many bearish signals we have regularly referenced, such as the “Key Reversal” and “Evening Star.”

This particular formation projects that the recent bitcoin price decline signals an end to the bubble. The pattern shows the price falling to the $900 level, where no real support exists until $600. According to the rest of our indicators, $850 can be pegged as an upper-bound resistance level that will serve as a ceiling for the probable bounce-back from $600.

Short-Term Analysis

bitcoin price technical analysis

Two weeks ago, a key reversal signal (occidental Bar Chart nomenclature) appeared at the top of the chart, signaling an end to the rally. Last week, an Evening Star (Japanese Candlestick nomenclature) appeared in the chart, reinforcing the previously predicted end to the rally.

Now, all technical figures and indicators are bearish. A Head and Shoulders formation stopped the bubble and broke the rising support at $1100. A second theoretical support exists at $850, but it appears weak, dependent on fluid volume and support from fundamentals.

What do you think will happen to the bitcoin price? Let us know in the comments below. 

Image via Pixabay

This technical analysis is meant for informational purposes only. Bitsonline is not responsible for any gains or losses incurred while trading bitcoin.

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