Bitcoin seems to be on the verge of collapse after soaring to an all-time high of $123,000 earlier this month. This reversal has surprised the market, as the altcoin market once again bears the brunt of the losses. Now, as the price of Bitcoin reaches a critical level, the question of whether this is the beginning of a bearish trend or whether the price will recover becomes more urgent.
Bitcoin Trend Declines After Reaching New Highs
After reversing back to $117,000, cryptocurrency analyst TehThomas announced an analysis outlining the current price trend of Bitcoin and its next direction. So far, the analyst explains that Bitcoin is still trading in a clear trend after being rejected from the resistance area above $120,000 multiple times. However, there is still a lot of resistance from the support levels below, which could be a cushion for the price.
As the analyst explains, the continued support threshold being held shows that there is still a lot of buying pressure on Bitcoin. This makes the support level around this area very tight, but also makes it a dangerous zone for buyers. There is a possibility of a reversal at this low level, and Thomas explains that such a move will create selling liquidity.
There is also a Fair Value Gap (FVG) at $121,000, which is still being defended. This is where much of the resistance originates, driving the price down below $118,000 multiple times. Therefore, this FVG is the next level to conquer in the campaign to reach new highs.
Recovery From Lows
If the recovery to the lows completes, the price of Bitcoin does not drop sharply, and in fact, this could be the move that triggers the next bullish wave. The analyst explains that buyers will need to come back at this price level, with a solid support level at $116,000. This accumulation during the consolidation process will be inherently bullish.
Looking back at the FVG, the analyst explains that it could act like a magnet if the price starts to rise again. However, all of this depends on whether the price of Bitcoin drops back to the support level and then bounces back up. A strong liquidity flow at the lows and the recovery will confirm that the price will continue on an upward trend.
However, there is still a possibility that the price will drop sharply from here. Thomas points out that the bullish argument will be invalidated if the support level of $116,000 is not maintained and there is no immediate recovery. "Bitcoin is still stuck in a clear range, and until a breakout occurs, the edges of that range provide the best trading opportunities," the analyst explains.$BTC
