The Bitcoin price (BTC) has been consolidating in the $6,900 to $7,100 range throughout the past 36 hours, right below a heavy resistance level at $7,200. Typically, a large price movement occurs when BTC gets stuck in a tight range for a prolonged period of time.<\/p>\n<\/p>\n
Crypto market daily performance. Source: Coin360<\/p>\n
Currently, there are three technical factors that show Bitcoin is vulnerable to a large move down: deviation from the descending trendline, the emergence of a fractal resembling the 2019 top, and the increase of Tether supply.<\/p>\n
Technically, when the Bitcoin price rejects off of a descending trendline, it suggests a bearish retest of lower support levels. Earlier this week, a cryptocurrency trader known as Trader XO suggested that in the near-term, the Bitcoin price could be following a descending trendline and possibly retest the months open.<\/p>\n<\/p>\n
Potential Bitcoin short-term price trend. Source: Trader XO<\/p>\n
The Bitcoin price ended up breaking out of the trendline to rise to as high as $7,200 on Coinbase, and the price of BTC is now hovering above the line at around $7,107.<\/p>\n
But, if the BTC price rejects the $7,000 resistance level and breaks back into the previous range, the entire move would be considered a deviation and would signal a severe downtrend.<\/p>\n
The $6,950 to $7,050 area has been an important area of resistance for Bitcoin throughout the past two weeks, and it has attempted to break out of it nine times since March 20.<\/p>\n
In February, before the economic consequences of the coronavirus pandemic were considered as a strong variable to the near-term trend of the Bitcoin price, BTC was showing signs of a local top at $10,500.<\/p>\n
The price rejected at a key multi-year resistance level and in the days that followed, BTC faced a steep downtrend to $7,700, eventually dropping to as low as $3,650.<\/p>\n
According to technical analyst, Crypto Capo, the current Bitcoin price trend is strikingly similar to the entire fractal that sent BTC from $10,500 to the $3,000s.<\/p>\n<\/p>\n
Bitcoin 2019 chart and recent 1-hour chart comparison. Source: CryptoCapo<\/p>\n
Although the comparison is between a daily chart and a 1-hour chart, the analyst said that if the structure of the chart is the same, it is likely to see a similar outcome regardless of the timeframe.<\/p>\n
Throughout the past two weeks, the supply of Tether (USDT) has increased significantly by more than $2 billion, as it surpassed $6.3 billion in market capitalization.<\/p>\n
The noticeable rise in the inflow of Tether into exchanges may indicate that the demand for the stablecoin is rising at a rapid rate, as investors seek for a safety net. In fact, a cryptocurrency investor known as Light recently said:<\/p>\n
Tether exchange balances ballooning as potential BTC supply available to be acquired on exchanges is falling.<\/p>\n
The fast growth of the Tether supply at a time wherein uncertainty shades above the cryptocurrency market could indicate that many investors remain cautious and skeptical towards the v-shape recovery of BTC since March 12.<\/p>\n
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