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Bitcoin recovers $20k level, JP Morgan warns of massive BTC selloff

Bitcoin recovers $20k level, JP Morgan warns of massive BTC selloff

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Answer Bitcoin recovers $20k level, JP Morgan warns of massive BTC selloff

Bitcoin has been trading within an ascending channel since hitting its lowest level on June 18.

These channels usually contain corrective movements, which means that the eventual breakdown will be the most likely scenario.

Bitcoin collapsed on August 26 and dropped to $19,520 on August 29.

Bitcoin rebounded the next day and created a bullish engulfing candle.

It is possible that this is the beginning of an upward movement that will lead to validation of the previous support line as resistance.

However, given the breakdown resulting from this long-term pattern, rejection and continuation of the downtrend would be the most likely scenario, as shown in the chart below.

Read:Bitcoin outperforms Ethereum in these 4 things… Get to know them

This potential downward movement is also supported by the data on the network. On August 30, 5,000 bitcoins that had been dormant for 7-9 years moved as JP Morgan indicated as selling this move.

All of the previous six instances in which this large portion of the premium bitcoin moved were followed by sharp downward movements.

The 6-hour chart supports the possibility of a comfortable rally.

The reason for this is a bullish divergence in the six-hour RSI, which has developed above the two lowest lows of late.

Currently, Bitcoin is making its fourth attempt to beat the line shown in the chart:

If this happens, the nearest resistance area will be found near $21,700, which is the 0.382 Fibonacci retracement resistance when measuring the entire bearish move.

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