Bitcoin did not recover and instead fell slightly over the weekend. The price is consolidating after it crashed last week, and this is starting to scare.
If you look closely at the daily chart, you can clearly see the bearish flag. During the consolidation, the main cryptocurrency formed a canvas of a figure, and the price reached a strong support level of 44,807.24 (red dotted line).
And this is where the complexity begins. On the one hand, the level 44,807.24 is strong - the price has never broken through it after it crossed into the range between the strong mirror support at 41,980.24 and the historical maximum.
On the other hand, the formation of a bear flag is a signal of continued movement. And the price, according to the logic of technical analysis, can fall even lower by a distance approximately equal to the height of the figure handle. And if this scenario works out, BTC/USD can fall below the level of 41,980.24, to the area of $38,000 per coin.
But we can assume that the strong mirror support level of 41,980. 24 will still not let the price go down. And the flag will not work out. And the main cryptocurrency will still somehow recover.
For example, on-chain analyst Willy Woo noted that after bitcoin collapsed as legal tender in El Salvador, whales with over 1,000 BTC increased their supply. And the supply of bitcoin holders with less than 1,000 BTC but more than 10 BTC has been largely stable.
However, Woo noted that the supply of public bitcoins had dropped. He explained that exchanges and ETFs are losing supply while corporations are seeing growth.
On September 12, cryptanalyst Ali Martinez noticed that about 50,000 BTC had been bought for expensive addresses in four days, draining exchange wallets. By that time, the supply of bitcoins on exchanges had dropped from 2.49 million to 2.42 million. Martinez also confirmed that these factors have reduced the pressure from sellers.
Financial expert Peter Schiff takes a more controversial point of view. He claims that the whales were actually waiting to cash out Bitcoin and receive dollars. He dismissed the notion that whales want to buy from smaller bitcoin holders.
Summing up this alarming uncertainty, traders need to remember the sobering rule: you trade what you see, not what you think. Therefore, in my opinion, now it is worth focusing on the strength of the support level 44,807.24 (red dotted line). Anchoring the price of bitcoin above the upper border of the flag canvas (which is about $48,000 per coin) may give little hope that the bearish signal will not work. If this does not happen, we will monitor the development of the situation around the levels 44,807.24 (red dotted line) and 41,980.24 (strong mirror support).
