- Bitcoin balances at a tipping point as losses to $25,000 beckon.
- A bearish pennant pattern adds credence to the pessimistic outlook and narrows the chances of recovery.
- If investors put aside their skepticism and heed the MVRV call to buy BTC, a recoil to $33,000 would be possible in subsequent days.
Investors are beginning to get accustomed to Bitcoin and the larger cryptocurrency market posting losses on a daily basis. BTC tanked to $24,500 a couple of weeks ago but regained some ground above $30,000.
However, bears quickly caught up, slowing the uptrend and pushing BTC below $30,000. At the time of writing, the king coin traded at $28,790 while bulls worked around the clock to absorb the building selling pressure and endorse a trend change.
According to the prevailing technical picture, losses are likely to dominate the next few days with $25,000 in sight, before an upswing commences.
Bitcoin Prints A Bearish Pennant Pattern
Over the last couple of weeks, Bitcoin’s price has mainly consolidated in a triangle pattern otherwise referred to as a pennant. As illustrated in the 12-hour chart, a bearish pennant pattern forms in a similar way as a symmetrical triangle pattern, but it distinguishes itself by having precise bullish or bearish biases.
In line with that, Bitcoin’s price was likely to revisit lower levels toward $25,000. Cementing the sellers’ presence in the market is the negative outlook of the Directional Movement Index (DMI). As long as the –DI stays above the +DI, odds will continue favoring the bears. In addition that, downward momentum is likely to intensify if support at $28,000 crumbles.
BTC/USD 12-hour Chart
At the same time, the IOMAP on-chain model from IntoTheBlock shed light on a robust supply barrier running from $28,920 to $29,729. Here, 997,650 addresses have previously scooped up around 674,000 BTC. If broken, Bitcoin’s price might quickly advance to highs around $33,000.
On the other side of the coin, the lack of solid support areas means that declines to $25,000 could quickly escalate. The only medium reprieve lies between $26,291 and $27,167. Roughly, 75,000 addresses have previously purchased about 163,000 BTC.
Bitcoin IOMAP Model
On the other hand, BTC might soon tap into fresh momentum for gains past the mentioned hurdles. This bullish notion comes after considering a buy signal from the Market Value to Realized Value (MVRV) metric by Santiment.
BTC MVRV Ratio
Some investors bought as soon as the price plummeted to $25,400 but the buy window was still open due to the -7.65% MVRV ratio. Bitcoin’s price is assumed to be undervalued when the MVRV slides below the mean line.