Bitcoin (BTC) price continues to fall and the ripple effect is an even steeper correction in altcoins and DeFi tokens. At the time of writing, the price of BTC has sunk to its lowest level in 6 months and most analysts are not optimistic about an immediate turnaround.
Data from Cointelegraph Markets Pro and TradingView shows that a The selloff that started late on January 20 continued until midday on Friday when BTC hit a low of $36,600.
Here is a record of what analysts have to say about the current recession and what may be in store for the coming weeks.
Traders expect a consolidation between $38,000 and $43,000
The sudden price drop in BTC has many crypto traders predicting several dire outcomes along the lines of an extended bear market. Others, like independent market analyst ‘Rekt Capital’, are not so quick to rush in and declare all is lost.
As shown in the following chart published by Rekt Capital, “The recent rejection of BTC means that BTC now resides in the lower region of its current range of $38,000-43,100.”
According to Rekt Capital, “Bitcoin is consolidating within the range of $38,000-43,100”, but it needs to hold this support level to avoid falling into a lower consolidation range.
RektCapital said:
“Technically, the $38,000 support area is what separates BTC from entering the $28,000-$38,000 consolidation range. Bitcoin last consolidated in such a range in the first and second quarters of 2021.”
Confirmed head and shoulders pattern
Analysis of BTC price action from a purely technical point of view was addressed by David Lifchitz, managing partner and chief investment officer of ExoAlpha, who noted that the “giant head and shoulders pattern for BTC now completes with broken neckline with BTC at $38,300.”
From a theoretical point of view, Lifchitz pointed out that this pattern predicts a possible drop as low as $20,000, but stated that “the drop has generally been less than that” and suggested that “the $31,000 region could definitely be in the offing.”
From a fundamental standpoint, Lifchitz pointed to multiple factors that are creating headwinds for BTC, including the tightening from the US Federal Reserve, talk from EU regulators seeking to ban proof-of-work mining, late 2021 profit-taking, and continued uncertainty about the economic future in relation to the Covid pandemic .
Lifchitz said:
“So for Bitcoin, a move lower-mid to $30,000 could definitely be on the cards shortly before any real buyers appear.”
Traders looking to accumulate BTC to $30,000
Cointelegraph analyst and contributor, Michaël van de Poppe, provided a look at how traders have responded to this drop compared to the pullback in June 2021, who public the chart below highlighting the main support zones for each period of weakness.
Van de Poppe said:
“In June → People are waiting for 23,000 to 25,000 dollars to buy. Right now → People are waiting for USD 30,000 to buy. Similar false breakout at the top to bomb later into support.”
Trader and pseudonymous Twitter user ‘Fomocap’ offered a similar point of view, who public the chart below outlining how BTC could perform in the coming days.
Fomocap said:
“Relief bounce to $44,000-42,000 to retest, if rejected then $35,000-33,000. What do you think?”
The bulls need a close above $39,600
Scott Melker, cryptocurrency trader, offered one last perspective, and public the chart below showing price breaking below a key level that needs to be recovered.
Melker said:
“Bulls looking for a Hail Mary close above $39,600 on the daily. A close below (especially weekly) is a break in the market structure, a lower low, etc. Bassists show no mercy.”
The total cryptocurrency market capitalization currently stands at $1.801 trillion and the dominance ratio of Bitcoin is 40.4%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
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