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Sell-off alert: Caution advised as Bitcoin resistance persists

Sell-off alert: Caution advised as Bitcoin resistance persists

After brushing off short-term corrections caused by geopolitical tensions, Bitcoin (BTC) has surged to establish a consolidation phase above the $66,000 mark.

However, as crypto analyst Ali Martinez highlighted in an X (formerly Twitter) post on April 24, technical indicators are raising concerns for the maiden digital asset amidst the current price movement.

Martinez pointed to the TD Sequential indicator’s recent sell signal on the 12-hour chart, indicating a potential downturn in Bitcoin’s price trajectory. The analyst underscored the significance of this signal, particularly noting the resistance encountered by Bitcoin at the mid-level of a parallel channel.

Bitcoin price analysis chart. Source: TradingView/Ali_charts

The analyst warned investors to exercise caution, citing the historical accuracy of the TD Sequential indicator. He added that Bitcoin faces more vulnerability if it drops below the $65,000 support zone. 

A breach of this support level could trigger intensified selling pressure, potentially leading to a more pronounced downturn in Bitcoin’s price.

The TD Sequential indicator is a technical analysis tool that measures sequences of consecutive candlesticks to identify potential trend reversals.

Bitcoin in limbo

At the moment, Bitcoin finds itself in uncertain waters following the halving event, with market participants expecting a potential surge towards the $70,000 mark. This comes amidst a backdrop where the crypto sector and other risk assets grapple with uncertainties from prolonged Federal Reserve interest rate cuts.

Notably, if Bitcoin maintains its price above $65,000, it stands a good chance of rallying, considering other bullish indicators. According to a report by Finbold, Bitcoin’s whale activity and the weighted sentiment of the crowd suggest a prevailing bullish bias. 

Moreover, market observers are closely monitoring how the industry will respond following the U.S. Department of Justice’s recommendation of a three-year prison sentence for Changpeng “CZ” Zhao, the founder and former CEO of Binance, regarding the exchange’s violations of federal sanctions and anti-money laundering laws.

Bitcoin price analysis

At the time of writing, Bitcoin traded at $66,238, experiencing daily losses of approximately 0.31%. 

Bitcoin seven-day price chart. Source: Finbold

The cryptocurrency has demonstrated a consolidation phase, supported by on-chain data indicating a tug-of-war between long and short-position holders. Data provided by Coinglass reveals that within 24 hours, short positions dominated the liquidation market, totaling $11.46 million. Conversely, long positions also significantly contributed, with liquidations amounting to $8.81 million.

Hence, the direction Bitcoin will take remains to be seen, as each potential path carries significant consequences.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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