Bitcoin (BTC) and the rest of the cryptocurrency market are moving within the lowest volatility in history due to investors showing extreme exhaustion. Although the price of the largest cryptocurrency is currently trading just above the $29,000 support with a 0.65% decrease in the past 24 hours, it seems likely to drop to $28,000 or even $25,000 levels due to bearish pressure.
Bitcoin Faces Rectangular Formation with a Bearish Outlook
The technical outlook on the four-hour price chart of Bitcoin indicates the formation of a rectangular pattern, suggesting vulnerability to a sharp downward break in the face of emerging bearish pressure. This bearish pattern is highly valuable as it allows investors to identify downward breaks in the price of BTC and turn the decline into profit.
The rectangular formation, which occurs when the price moves horizontally between two parallel horizontal lines, indicates that sellers and buyers are in temporary balance and that the price consolidates before continuing its decline. Bitcoin has consolidated between $28,800 and $30,200, resulting in the formation of a rectangular pattern.
To trade based on the significant bearish rectangular formation, investors should wait for a break below the lower support line at $28,800, which indicates that sellers have taken control and the price is ready to drop. After the break, a short position can be opened with a stop loss placed above this line and a profit target based on the height of the rectangle. According to the formation, the target level for the short position after the break will be $27,469. Panic selling may occur, causing the price of Bitcoin to drop to $25,000.
Moving Average Convergence Divergence (MACD) indicator confirms the weakening market structure and currently gives a sell signal. Investors are advised to consider short positions in BTC, as indicated by the blue MACD line crossing below the red signal line. Additionally, the momentum indicator staying below the average line (0.00) indicates that sellers are in control.
Bitcoin Exhibits Historic Levels of Exhaustion and Indifference
Glassnode, an on-chain data platform, reported that the cryptocurrency market is experiencing very low volatility, which can be described as historically bottom levels. The platform highlighted various measurements indicating extreme indifference and exhaustion as the price moves between $29,000 and $30,000.
Glassnode added, “The realized market value is slowly increasing. This indicates that the excessively boring low-volatility sideways price movement will continue.”
