Bitcoin is fighting tooth and nail to hold above $19,000 and avoid possible losses to $15,500.
The reduction in network growth since the beginning of September helps to validate the downtrend.
Bitcoin has bagged $19,000 again but failed to overcome the resistance at $19,200. The most critical level at $19,500 was not touched. Meanwhile, BTC is correcting towards $19,000 amid a bearish building momentum. The declines likely to come into the picture could be massive, perhaps extend to $15,500.
Bitcoin is drawing closer to a significant breakdown
The flagship cryptocurrency’s bulls are working tooth and nail to hold above $19,000. A freefall will come into play if BTC breaks under the ascending triangle’s hypotenuse.
The tentative sharp drop could overshoot other vital levels such as the 50 Simple Moving Average, the 100 SMA, and 200 SMA. Last week’s support at $16,500 might absorb some of the selling pressure. Otherwise, a break under the hypotenuse eyes $15,500. For now, the least resistance path is downwards, as highlighted by the Relative Strength Index.
A sharp slump in the number of new addresses joining the network adds credence to the bearish outlook. According to IntoTheBlock’s ‘Daily New Addresses’ model, the newly created addresses have dropped from roughly 616,000 on December 1 to nearly 472,000, representing a 23.4% decline.
Note that this metric helps to identify if the network is growing, stagnating, or falling. A decrease in network growth is a bearish indicator for both the price BTC and its network. Therefore, if the fall continues, BTC’s breakdown will be validated.
On the other hand, it is essential to know that the bearish outlook will be sabotaged if Bitcoin closes the day above $19,000. This will avert losses under the triangle’s hypotenuse. Moreover, trading above the x-axis might boost Bitcoin significantly above $20,000, perhaps to $23,000.
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