Bitcoin price is currently at around $31,800 after a massive 10% drop today. For the first time during the recent bull rally, it seems that BTC has lost the 26-EMA support level on the daily chart which has been a robust support point.
Although the day hasn’t ended yet and there is a small chance for BTC price to climb back above $33,400, the most likely scenario will be a close below the 26-EMA for the first time since October 2020.
Can Bitcoin price recover from this crash and resume the bull rally?
On the 12-hour chart, we can see a clear breakdown of the symmetrical triangle pattern which has a long-term price target of $22,000. Fortunately, there are some significant support levels on the way down.
The first level can be found at $30,487 which is close to the psychological level at $30,000. Bulls must defend this critical point to avoid another massive leg down. If BTC price breaches $30,000, the next level would be $28,000 which is practically the last hope for the bulls.
The importance of zooming out
For most beginner traders and cryptocurrency enthusiasts that are not experts in trading, this crash might seem like the end of Bitcoin. However, it’s always important and critical to zoom out.
If we take a look at the weekly chart, from Bitcoin’s all-time high at $41,950, this is only a 25% correction so far. The chart clearly remains bullish and we were expecting a higher low sooner or later after so many weeks of upside action.
Even now, the RSI is still overextended, but the 12-EMA support level is all the way down at $26,300. The 26-EMA is located at $20,198. Even if Bitcoin price touches $20,000 and bounces from there, the weekly uptrend would not be lost.
The number of large Bitcoin holders hasn’t budged despite the significant sell-off. There are still 99 whales holding between 10,000 and 100,000 BTC. This number was 96 back on January 1. Similarly, the number of large holders with 1,000 to 10,000 coins also increased from 2,187 to 2,354.
It’s also important to note that the number of Bitcoin inside exchanges also hasn’t increased. This means that the recent sell-off isn’t necessarily too organic and whales haven’t been shaken out just yet.