Bitcoin (BTC) is holding above the minor $20,000 support area and is showing bullish signs in the near-term. The long-term trend remains undetermined.
BTC has been falling since it peaked at $22,799 on Sept. 13. On the same day, it created a large bearish candlestick.
The decline served to validate the $22,670 area as resistance and also tested the channel’s previous support line (red symbol).
Furthermore, the decline caused an RSI move below 50 (red circle). Now, the movement of the RSI above and below 50 is a sign of an indeterminate trend.
If bitcoin keeps falling, the next support area would be $19,000.
Future BTC movement
The 6-hour chart is showing a slightly more bullish outlook but cannot clearly confirm the direction of the trend.
While bitcoin broke out of a descending resistance line, it failed to sustain its bullish move and fell into the minor $20,000 support area.
The slight bullish bias comes from the fact that the upside divergence trendline (green line) is still intact on the RSI.
The two-hour chart supports the possibility of a recovery. The two main reasons for this are the RSI bullish divergence and the formation of a bullish hammer and then a bullish engulfing candle (highlighted).
Thus, it is possible for a rally towards the 0.382-0.5 Fib retracement resistance levels at $20,840-$21,200 before further decline.
Relative unrealized loss
An interesting indicator that could shed some light on the direction of future movement is the Relative Unrealized Loss indicator. The indicator measures the total loss of all existing coins whose price at the time of their last movement was higher than the current price. Then the indicator is normalized by market capitalization.
The relative unrealized loss usually increases sharply during market lows. This was visible in 2015 at a value of 1.14, in 2018 at a value of 0.75 and in 2020 at a value of 0.44. Such high values are considered a sign of surrender.
So far in 2022, the indicator has peaked at 0.54.
The interesting development is the presence of a slightly lower high. Historically, RUL has hit slightly lower highs (green lines), while BTC has hit slightly higher highs each time before the start of a new market cycle. The time it took for this high to form varied, ranging from three to seven months.
In 2022, the bottom high was formed between June and September (black line).
So, following history would mean that the price has already made a bottom or is very close to it.
To be[in]Crypto’s previous Bitcoin (BTC) analysis can be found here
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