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Bitcoin (bitcoin) prices continue to sell off and the knock-on effect is a sharper correction for altcoins and DeFi tokens.At the time of writing, the BTC price has dropped to Lowest level in 6 months Most analysts are not optimistic about an immediate turnaround.
data from Cointelegraph Market Pro and Transaction view The wave of selling that began late in the day on Jan. 20 showed continued until midday Friday, when BTC hit a low of $36,600.
Here’s what analysts are saying about the current economic downturn and what’s likely to happen in the coming weeks.
Traders expect a consolidation between $38,000 and $43,000
The sudden price drop of BTC has many cryptocurrency traders predicting all kinds of dire outcomes as the bear market expands. Others like independent market analyst “Rekt Capital” weren’t so quick to shoot the bullet and declare that all was down.
As shown below post According to Rekt Capital, “the recent rejection of BTC means that BTC is now in the lower region of its current $38,000 to $43,100 range.”
According to Rekt Capital, “Bitcoin is only consolidating within the $38,000 to $43,100 range,” but this level of support needs to be held to avoid falling to a lower consolidation range.
Rekt Capital said,
“Technically, the $38,000 support area is what separates BTC from entering the $28,000-$38,000 consolidation range. The last time Bitcoin consolidated within the aforementioned range was in Q1 and Q2 2021.”
Confirm the head and shoulders pattern
David Lifchitz, managing partner and chief investment officer at ExoAlpha, spoke about analyzing BTC price action from a purely technical perspective, noting that “BTC’s massive head and shoulders pattern is now complete, with a broken neckline at $38,300.”
From a theoretical standpoint, Lifchitz noted that the pattern predicts a drop as low as $20,000 is possible, but he said “the drop is usually less than that,” and suggested that “the $31,000 area is definitely on the horizon.”
From a fundamental standpoint, Lifchitz pointed to multiple factors as headwinds for BTC, including Fed tightening, chatter from EU regulators looking to ban proof-of-work mining, profit-taking in late 2021, and the ongoing Covid-19 pandemic. Uncertainty about the future of the economy prevails.
Lifchitz said,
“So for Bitcoin, a drop to the mid-to-low $30,000s is likely soon before the real bargain hunters emerge.”
Trader looking to buy BTC for $30,000
Analyst and Cointelegraph contributor Michaël van de Poppe provides traders’ reaction to this pullback compared to the pullback in June 2021, he said. post The chart below highlights the major support areas for each period of weakness.
the pope said,
“Back in June → people were waiting for $23,000 to $25,000 to buy. Now → people are waiting for $30,000 to buy. Similar upside false break followed by support.”
Trader and pseudonymous Twitter user “Fomocap” made a similar point, saying he post The chart below provides an overview of BTC’s performance over the next few days.
Fomocap says,
“Relief bounces back to $44,000 – $42,000 for retest, $35,000 – $33,000 if denied. What do you think?”
related: Crypto Twitter Responds to Bitcoin Dump: ‘So Cool’
Bulls need a close above $39,600
Crypto trader Scott Melker offers one last bit of insight as he post The chart below shows the price breakdown below the key level that must recover.
Melk said,
“Bulls looking for a Hail Mary daily close above $39,600. A close below (especially weekly) is a breakout of market structure, lower lows, etc. Bears show no mercy.”
The overall cryptocurrency market capitalization is currently $1.801 trillion, with Bitcoin dominance at 40.4%.
The views and opinions expressed here are those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk and you should do your own research when making a decision.
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