Bitcoin Rejected at $21,000, Why a Retest of Lows Could Be Positive

Bitcoin appears to be about to retest previous support levels. The No. 1 cryptocurrency has been experiencing a sustained decline that has brought it to a multi-year low of around $17,000.

Related reading | Two months of extreme fear send cryptocurrency into panic, Bitcoin at $20k

Bitcoin has been trying to regain previously lost territory, but the selling pressure has continued due to negative news surrounding the cryptocurrency space and a shift in Federal Reserve (Fed) monetary policy. At the time of writing, BTC is trading at $20,000, down 10% over the past week.

BTC is trending down on the 4-hour chart. resource: BTCUSD trading view

Analyst Michaël van de Poppe believes that the price of BTC is still well-positioned after the $21,000 rejection. If the cryptocurrency manages to hold above $20,000, there could be more fuel to continue the bullish run.Via Twitter, the analyst Say:

Sweep the lows and hold. Just hold $20,000 to sweep previous highs of $21,000, then higher highs of $23,000 and potentially $24,000 are feasible. The bulls are still open.

Data provided by Material Indicators (MI) recorded some support for Bitcoin below $20,000. This suggests that the cryptocurrency may break below current levels.

However, about $30 million in bitcoin bids and orders are around $19,000. This area should act as a key support if it falls further.

If these levels fail, there are still $40 million in bid orders in the $17,800 to $18,000 range, which could provide additional support.The order book looks thin below these levels

BTC (blue line on the chart) was bid around $18,000 at $40 million. Source: Materials Metrics.

Above current price levels, there are more than $20 million in ask orders around $21,000 alone. This level will continue to act as a major resistance area and a barrier for BTC price to consolidate around this area.

Material Indicators Analyst shared Here are the barriers between BTC and future appreciation:

That’s why we’re waiting for confirmation. Despite yesterday’s rally in sentiment and #TradFi, the rally lost steam ahead of a test of the 200 WMA. Fire Charts now shows about $60 million in asking price liquidity stacked between this and the 200 WMA range.

When will Bitcoin bottom?

In this sense, the analyst from MI emphasized that it is impossible to determine when BTC will bottom. However, there are some clues that can help investors identify a bearish trend decline.

Related reading | Bitcoin Miner Liquidation Threatens Bitcoin’s Recovery

For example, the price of BTC usually bottoms out and then enters a period of consolidation for a long time. Another leg is not ruled out, the analyst said via Twitter:

The market is long overdue for a rally, and the fact that it has historically moved to or below the 200 WMA has led to a bull run, and we cannot verify this until price recovers from the key moving average from the 200-week MA.

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