Bitcoin (BTC) appeared poised to reclaim the crucial $18,000 support level after briefly breaching the $17,000 position, with bulls under pressure to show strength. However, the asset has since plunged below $17,000 as the broader crypto market sell-off continues.
Notably, the maiden cryptocurrency has been consolidating in recent weeks, mainly characterized by sideway price movement as investors look for possible indicators likely to define the next price action.
In this line, Bitcoincenter’s rainbow price chart is one of the tools investors use to monitor the prospects of Bitcoin’s price. The tool leverages colour bands that follow a logarithmic regression and reviews past performance to provide a potential insight into its long-term movements.
As of December 7, the Rainbow chart Bitcoin indicator had hit the lowest point under the ‘’Basically a Fire Sale’ level, represented by the colour blue. The asset has been consolidating at the position, having been stuck in the zone for several weeks.
The charts’ ongoing consolidation indicates that Bitcoin has found a bottom, facing the potential of rallying in the near future. In this line, as reported by Finbold, based on the two-week cross in Bitcoin’s moving average convergence divergence (MACD) that has recently occurred, the cryptocurrency could be preparing for a bottom and big rally soon.
It is worth noting that the last time Bitcoin hit the level was in March 2020 before embarking on a bull run that culminated in last year’s all-time high of almost $69,000.
Bitcoin price analysis
As things stand, Bitcoin is changing hands at $16,804, having corrected by about 1% in the last 24 hours. The weekly chart shows BTC’s price peaked at $17,300 on December 5.
At the moment, bears have more strength and sustained pressure on the $16,800 support could see Bitcoin drop further to around $16,400.
Bitcoin’s next price action
Notably, Bitcoin has consolidated below $17,000 as investors continue keeping tabs on risks related news likely to affect Bitcoin.
Besides the fallout from the FTX crypto exchange collapse, investors will be watching the inflation data set for December 13, considering that part of BTC’s poor performance has been tied to the prevailing macroeconomic factors.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.