On April 22, the Bitcoin (BTC) price increased considerably from a low of $6818 to a high of $7158. This created a bullish engulfing candlestick. However, the price failed to move above an important resistance level that would otherwise indicate that the current trend is bullish.

The Bitcoin price is still trading inside its $6650-$7150 range. At the time of writing, it was trading between the midpoint (EQ) and the resistance line — having been rejected by the latter several hours prior.

Bitcoin Fractal

The Bitcoin price has moved above both the 50- and 200-hour moving averages (MAs), which have made a bearish cross. The relation between the MAs and the price gives conflicting signs. While the cross is bearish, the fact that the price is trading above them is bullish.

The same cross transpired on April 11. Interestingly, the BTC price acted in the exact same manner. It moved above both MAs shortly after and tagged the resistance line of the range. What followed was a very sharp drop towards the support line of the range.

If the same movement occurs this time around and it takes the same amount of time to transpire, the BTC price will break down towards the support line today. On the other hand, a movement above the resistance line of the range would invalidate this fractal.

Long-Term Range

The possibility of the fractal being completed is also strengthened by the descending resistance line that the Bitcoin price has been following since reaching a high of $7454 on April 7. Yesterday’s high served to validate this line for the third time while also creating the third successive lower high.

If the price continues its downward move while also completing the fractal, it will drop and fall back inside the longer-term $5700-$6900 range. This could have major bearish implications for the price of BTC since it would likely fall towards the EQ of $6300 and then, possibly, towards the support line of $5700.

To conclude, the Bitcoin price was rejected by the resistance line of its short-term range and the descending resistance line it has been following since April 7. This movement is in line with the fractal that BTC has been following, which suggests that the price will drop sharply towards $6700 — and possibly lower.

For those interested in BeInCrypto’s previous Bitcoin analysis, click here.