It appears that the year-end rally that many cryptocurrency traders were expecting will have to wait until 2022, as the Bitcoin (BTC) bears gained the upper hand on December 28 and knocked the price of BTC below the support at $ 48,000.
Data from Cointelegraph Markets Pro and TradingView shows that an early morning selloff broke BTC support at $ 50,000 and was followed by a second early afternoon wave that dropped the major cryptocurrency to a daily low of $ 47,318 before the bulls managed to stop the exit. .
Here’s a look at what various market analysts are saying about the reasons behind this latest correction and what to watch out for as 2021 draws to a close.
A bearish divergence of the RSI before the reversal
Options trader and pseudonymous Twitter user John Wick offered insight into the technical reasons for the year-end correction for the price of BTC, who public The following graph highlights a bearish “fake” when the price of Bitcoin began to reverse.
Wick explained:
“We form a double top clearly defined by the bearish divergence of the RSI. Notice how the price action was trending up, while the RSI was trending down. We also had a bearish fake of Alpha Thrust & Squeeze. “
Possible drop to $ 44,000
Bitcoin’s continued struggles in the 21-week exponential moving average (EMA) were highlighted in the following chart by market analyst and pseudonymous Twitter user Rekt Capital. The weekly chart shows the difficulty that BTC has had to overcome the technical indicator.
According to Rekt Capital, Bitcoin’s price action is similar to a scenario that occurred in May “in which Bitcoin is experiencing a multi-week consolidation between the two bull market EMAs,” and the price could soon return to the USD level. 44,000. He continued:
“Historically, BTC has wicks down the orange area during this red retest, so there is scope for another orange review.”
Waiting for a breakout above $ 52,000
Pseudonymous Twitter user and analyst “Don Alt” offered suggestions on what traders should watch out for in the coming days and weeks, who public the graph below showing that Bitcoin is in a “pretty clean downtrend, for now”.
Don Alt indicated that there is not much to see if BTC continues to trade in a range at these current levels. You are now waiting for a clear break above the first red resistance zone on the chart above, which is near $ 52,000. Don Alt explained in more detail:
“I’m starting to get hopeful above $ 52,000, above $ 60,000, the raging bull market is back. Until either of those things happens, I’ll be looking for deep highlights and concentrating on other, more exciting things. “
The total cryptocurrency market capitalization currently stands at $ 2.234 trillion and Bitcoin’s dominance index is 40.3%.
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