Why The Bitcoin Price May Be Ready To Return To $20,000

The Bitcoin price managed to close yesterday’s daily candle above critical support, giving bulls a fighting chance to prevent further downside. However, today’s trading session has favored the bears, with BTC moving below the $19,000 area. 

Bitcoin currently stands at $18,900. There has been a 1.4% drop in bitcoin’s value over the past 24 hours. The trend is similar for other cryptocurrencies, except Cardano (and Solana) which are in the crypto market top 10. These cryptocurrencies suffer massive losses. 

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BTC’s price moving sideways on the 4-hour chart. Source: View Tradingview BTCUSDT

Bitcoin Price Takes Downside Liquidity

Bitcoin’s price reacted negatively to last week’s September Consumer Price Index print by the U.S. government. This is one benchmark for inflation and the September print suggested higher levels. 

The U.S. Federal Reserve will then tighten the monetary environment of the global markets. This will limit any bullish momentum in Bitcoin or risk-on assets. 

As the September CPI print came out, this was due to higher inflation and a Fed that is hawkish. Bitcoin prices fell back to $17600 annually. BTC recovered quickly and reached the $19,000 mark. 

Many traders took long positions during the Flash Crash, when BTC recovered. They expected higher moves and left large amounts of liquidity. Justin Bennett an analyst, says the Bitcoin price will take that liquidity in order to resume its bullish momentum. 

Bennett noted that BTC moves in tight ranges between $18,600 to around $19,800. It is possible that the cryptocurrency will return to these levels, before trying again to break through critical resistance at $20,000 or higher. Analyst saidThe following are the same as the charts below. 

This is my strategy for $BTC every day. It was a combination of last Thursday’s long lower wick getting partially filled + the liquidity gap at mid $18k + channel support.

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BTC’s price taking liquidity at $18,600 and moving into $19,800. Source: Justin Bennett via Twitter

Bitcoin Shows Signs Of Capitulation

This is the current trajectory that the Bitcoin price follows at the moment. Bitcoin is now back within its normal range, and may be trying to climb the highest point of the channel.

Bennett indicated that Bitcoin may be building momentum in order to move into the center of the $20,000 zone before moving lower on longer time frames. 

Research firm Santiment has data that Bitcoin appears to be in the process of giving up. BTC owners have capitulated in large numbers over the last months. This makes this lengthy period of consolidation an unpleasant step towards the future. 

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