(Akash Girimath – FXStreet)
– Bitcoin price could see a strong recovery bounce if it manages to flip above the recently broken trend line.
– In such a case, investors can expect a revisit to $20,750 and $22,400.
– A failure to flip above the broken trend line could send BTC to collect liquidity resting between the July 13 and June 18 swing lows at $18,889 to $17,578, respectively.
Bitcoin price is lost in no man’s land after crashing below $22,000 on August 26. This sell-off was followed by a tight consolidation that led to another nosedive that has pushed BTC below its support trend line.
A recovery above this level will signal an imminent bounce, but a failure could result in a swift continuation of the downtrend.
While the technicals are bearish in the long term and ambiguous in the short-term, crypto adoption seems to be going well as the Monetary Authority of Singapore (MAS) considers implementing new restrictions regarding the use of leverage in cryptocurrency markets.
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Ravi Menon, the managing director at MAS said that retail investors are oblivious to the risks involved in trading and leverage but also acknowledges that banning cryptocurrencies will not work.
Bitcoin price hopes for a recovery
Bitcoin price has slipped below the ascending parallel channel formed between August 19 and 25, triggering a 10% crash to $19,513. So far, the sellers seem to be pausing, allowing buyers to step in.
If successful, this development could trigger a recovery rally to retest $20,750. Depending on the momentum, however, this move could extend to $22.400.
Confirmation of this bullish move will come from BTC recovering above the declining trend line formed by connecting the June 30 and July 13 swing lows.
Regardless of the buyers’ attempts, market makers are likely to target the liquidity resting below the swing lows formed between July 13 and June 18, pitching Bitcoin price lower to try and scrape it up. This would lead to an extension down from $18,889 to $17,578, especially if bulls fail to step in.
Read Eighteen ‘uncomfortable’ truths about nonfungible tokens
