As the king coin tries to overcome significant resistance on the upside, the price is stuck close to the $23,000 support area. The upward momentum is waning, and the BTC bulls are beginning to appear worn out. The coin price fell to the $22600 support area at the end of July before reversing as the BTC price showed multiple higher price rejections at the resistance trendline.
As far as the technicals are concerned, the selling trend of short-term investors indicates that the prices are likely to decline. Similar patterns can be seen in technical indicators. Despite Bitcoin’s rising wedge pattern, the asset’s outlook remains unfavourable. According to Cryptoquant analysis, there is a bearish divergence below the resistance line of the RSI and MACD oscillators.
“Below the resistance line, we see a negative divergence in RSI and MACD oscillators. These can be a pre-signal of the possibility of wedge breakdown.”
Another indicator, the Expenditure Output Profit Ratio (SOPR), also shows a strong downward trend and suggests a possible price reduction.
“The short-term investors’ SOPR has climbed to level 1 in a descending trend.” The SOPR is determined by dividing the value at output generation by the realized value in USD. When SOPR is declining, investors are frequently selling to hedge against probable losses.
So what next?
Bitcoin started the week trading above $23,000 before falling below $23,000 due to mounting pressure, recent interest rate hikes by the US central bank, and ongoing tensions between China and Taiwan. However, the bulls were able to recover the $23,000 that the cryptocurrency lost from its weekly advance. According to the analysis, if BTC is unable to maintain its current price range, it could drop below the $22,600 support. The next support level, if BTC is able to hit it, could be near $22,200.
At the time of writing, Bitcoin is trading in red at $23,118.
