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There is an ever-present debate over whether the current Bitcoin (BTC) price movement is bullish or bearish. While the short and medium-term price movements can remain unpredictable, long-term calculations suggest Bitcoin might eventually reach $1M. 

Since Bitcoin has a fixed supply cap of 21 million coins, it is likely immune to the effects of inflation. The same cannot be said for USD. Therefore, the BTC/USD ratio increases at a steady inflation rate. Theoretically, just holding Bitcoin for a year would result in a purchasing power increase as much as the inflation rate, without accounting for any real increases in its price.

In the short-term, the Bitcoin price has been decreasing since October 25. It is approaching two major support areas that could be successful in reversing the price. Cryptocurrency trader @crediblecrypto stated that the Bitcoin price has almost reached the second major buy zone at $8000-$8300. After the Bitcoin price failed to bounce at $8600, this is the closest area that can provide a reversal.

Depending on when the Bitcoin price reaches it, a breakdown from the current trading pattern could be required for the price to get there.

Let’s take a closer look at the Bitcoin price movement and see if this decrease is likely.

Bitcoin’s Support Levels

Looking closer at the Bitcoin price movement, we can see that the $8600-$8700 support level (0.5 Fib) has turned to resistance, as evidenced by the creation of a bearish shooting star. However, we feel that the second buy zone can be divided into two more specific buy areas:

A breakdown below the $8300 area would likely initiate a rapid decrease towards $8000. It would also indicate that the descending wedge has been broken.

Bitcoin Descending Wedge

Bitcoin Descending Wedge

Double Bottom

Looking closer at the Bitcoin price movement, we can see that BTC made a double bottom at $8400 — which was combined with long lower wicks. The second bottom was characterized by a bullish engulfing candlestick.

Based on the height of the pattern, a breakout from this range would likely take us to $8700.

Bitcoin Target

Bitcoin Target

Also, both the RSI and MACD show a growing bullish divergence. This suggests that an upward move is in store and that Bitcoin will likely reach the resistance line of the wedge. Thus, a breakout cannot be ruled out.

Bitcoin RSI Divergence

Bitcoin RSI Divergence

Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.

Images courtesy of Twitter, TradingView.


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