The decrease in volume and resistance to $19,500 are setting the price of Bitcoin in a range of adjustment.
As mentioned by Cointelegraph contributor Rakesh Upadhyay, the price of Bitcoin spent the weekend consolidating into a bullish flag and the $19,418 breakout was quickly eliminated by the superior resistance.
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After touching up the pennant trend line, the price dropped, falling below the 20-day moving average in the 4-hour time frame and briefly missing the $19,000 mark.
Cryptomarket daily price chart.
Overall, most traders seem to agree that after a 93% rally from USD 10,300 to USD 19,888, a period of consolidation is necessary. Cointelegraph analyst Micheal van de Poppe said:
„In the longer time frame, Crypto Code is still acting as it did last week. We continue to act in the zone of resistance of the historical maximum. I still have my eyes on USD 16,000, from which we bounced, and USD 14,000 as these areas could still be tested again for support. Maintaining USD 19,000 is important and if we have a daily close below USD 18,900, I think we will fail.
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In the daily and 4-hour time frame, traders will notice that the price is still marking lower highs and lower lows, a sign that the price range is starting to shrink.
Currently, the price is still within the trend line of the pennant as support, but a breakout in the structure will require a high volume move as there is persistent superior resistance at USD 19,500.
As mentioned in the analysis above, a fall below the USD 18,800 level will cause BTC to look for support at USD 17,900, and below it it will look for support in the USD 16,000 to USD 15,750 range.
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In the short term, risk averse traders are likely to watch the 4 hour chart closely to see if the price can find support above the 20 day MA again to exit the pennant. It is important to note that this move will require significant volume to avoid rejection in the $19,400 to $19,500 resistance zone.
Usually, during Bitcoin’s consolidation phases, the price of altcoins goes up, but this wasn’t the case this time.
While a selection of DeFi tokens and other small altcoins have moved higher, most of the top 20 currencies are in red today.
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This is possibly due to the fact that investors are reluctant to switch funds to altcoins while the price of Bitcoin is in such a shaky position.
Experienced investors know that a strong upward break in BTC could result in the destruction of the BTC altcoin pairs, while a downward break in the BTC price tends to cause the BTC and USD altcoin pairs to take an equally catastrophic beating.
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Some highlights of the day are, AAVE with a gain of 8.54%, Monero (XMR) which rose 5.19% and Waves (WAVES) which has recovered 6.23%.
According to CoinMarketCap, the total capitalization of the crypto market is now USD 566.5 billion and the Bitcoin domain index is currently 62.6%.