Bitcoin price analysis 1/11/2024: Will BTC crash again? Key indicators suggest a potential downturn

Bitcoin’s price recently approached its all-time high but has faced difficulties in sustaining momentum, leading to concerns about an impending price crash. This article discusses two primary indicators that hint at bearish trends for Bitcoin.

Will Bitcoin Price Crash Again?

Here are two reasons why BTC price might crash.

US Election-Related Market Volatility: With the U.S. presidential election results approaching, significant market volatility is expected. Historically, such high-impact events trigger uncertainty across financial markets, and this election could be particularly impactful on Bitcoin due to investor risk aversion. A potential sell-off or “wait-and-see” approach among investors could affect Bitcoin’s short-term performance, especially as markets react to election results and potential policy shifts.
Decline in Active Bitcoin Addresses: Recent data shows that active addresses on the Bitcoin blockchain are down by approximately 25% from their March 2024 peak. The current active address count hovers around 734,000, compared to a previous high of nearly 986,000. This decrease reflects lower investor participation, suggesting that the recent price rally may lack robust support from a broad base of investors. Reduced activity signals that new capital might not be flowing into Bitcoin as strongly, raising concerns about the sustainability of the rally.

Bitcoin price analysis

According to the daily chart, the seven-month consolidation has created a value area that extends from $68,958 to $59,364. On October 31, Bitcoin fell nearly 4%, testing the resilience of this range. Should this downward trend persist, the immediate critical support level to watch is $68,958, which currently marks the high end of this value zone.

For Bitcoin to remain bullish, it is essential that it does not break below this crucial support. Should this level fail, it could signal the onset of a significant correction. The next area of interest would be $63,099, a level representing the highest trading volume over the past seven months and a likely point of price stabilization if Bitcoin begins to drop further. In the event of sustained selling pressure, Bitcoin’s value area low of $59,364 could be retested.

A breach of the $68,958 support could trigger an 8% to 13% price drop, amplifying concerns over a larger downward shift.

On the flip side, if Bitcoin manages to bounce off the $68,958 support level and maintain this position through the upcoming U.S. elections, it could indicate resilience and bullish sentiment. A stronghold above this level may act as a springboard for Bitcoin, potentially pushing the price toward a new all-time high in November.

RSI (Relative Strength Index)

The RSI (14) is currently at 37.30, indicating a bearish sentiment, as it lies below the neutral 50 level. This level suggests that Bitcoin may be in oversold territory, hinting at the potential for a reversal if buying interest increases. The recent movement below 40 confirms a downtrend in momentum.

RSI-Based Moving Average (MA)

The RSI-based MA (yellow line) is at 33.92. With the RSI slightly above this moving average, it could be an early sign of a potential recovery, though it still signals weak buying strength in the current trend. For a confirmed reversal, the RSI would need to cross significantly above the RSI-based MA.

Bollinger Bands

Middle Band: The middle Bollinger band (SMA) is positioned at 70,859.95, reflecting the primary resistance level.
Upper Band: The upper Bollinger band is at 70,933.38, which could act as an overhead resistance if the price rebounds.
Lower Band: The lower Bollinger band stands at 69,066.82, providing a crucial support level. Price movements towards this lower band signal increased selling pressure but could also indicate a buying opportunity if support holds.

Conclusion

The current technical indicators suggest Bitcoin is facing bearish pressure, with RSI and the lower Bollinger band showing potential oversold conditions. Should RSI move above the RSI-based MA and price break past the middle band, there could be signs of a recovery. However, continued resistance at the upper band would likely keep BTC in its current range.