The price of Bitcoin (BTC) consolidated above $ 42,000 ahead of Wall Street’s opening bell on January 7 as more similarities emerged to last year’s lows.
BTC mimicking May’s behavior “very closely”
Data from Cointelegraph Markets Pro and TradingView tracked a nervous Bitcoin market as the BTC / USD pair avoided another test of support at $ 40,000.
Previously, After briefly dipping below $ 41,000, analysts had warned that a new capitulation event could occur, potentially sending the pair down to $ 30,000 or even higher.
That figure is true for market participants, as they formed the floor of a protracted capitulation that lasted from May to July last year.
Then, as now, mining turmoil combined with macroeconomic factors to temporarily remove momentum from the Bitcoin bull market.
“BTC is following May 2021 very closely,” noted trader and analyst Rekt Capital in a series of tweets about current price action.
He noted that as of Friday, the BTC / USD pair was making a breakout of the 50-week exponential moving average (EMA), as was the movement in mid-July that formed the bottom of that capitulation phase. The 50-week EMA stood at $ 45,000 on the day.
The #BTC capitulation event below the blue 50-week EMA is in progress$ BTC #Crypto #Bitcoin pic.twitter.com/KGvl2ogbGO
– Rekt Capital (@rektcapital) January 7, 2022
Meanwhile, Cointelegraph contributor Michaël van de Poppe pointed out the differences between the two phases.
This time, a “rapid correction to the south” means that the prolonged sideways movement and break to the upside since 2021 does not generally characterize the current market.
“The $ 46,000 level is still very important to watch. If it breaks down, I think the entire bear market is over or the full correction is over and we are looking for upside potential,” he said during his latest YouTube update.
Ethereum has a trader planning a buy-in of $ 2,200
Altcoins also saw trouble on the day, following warnings that any strong move previously was likely a red flag, a bullish trap.
Ether (ETH), the largest altcoin by market cap, is down 4.5% at the time of this writing to close to $ 3,000, down from $ 700 in a week.
Some of the top ten cryptocurrencies by market capitalization escaped the downtrend, with Cardano (ADA) rising 1.2% to $ 1.23 and XRP flat.
A still very cautious Pentoshi identified levels as low as $ 2,200 to buy ETH, hoping it will arrive “sometime this year.”
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