Bitcoin (BTC) bulls are on the defensive again after the breakout momentum that put the price above $ 50,000 on the weekend evaporated and dragged the price below $ 47,000. Analysts say the slight pullback in equity markets and the upcoming Federal Open Market Committee (FOMC) meeting are the main reasons for today’s slide with some suggesting that a re-visit to the swing low at $ 42,000 could be within the possibilities.
Here’s what analysts are saying about Bitcoin’s current price action and what to expect in the near term.
Fed tapering talks put pressure on the market
The headwinds that BTC is currently facing are largely influenced by regulatory issues in the United States, as highlighted in a recent Delphi Digital report, which notes that “The latest tightening of world policy makers and the Fed tapering have already caused a correction in the markets.”
Delphi Digital said:
“BTC is among one of the worst performing assets compared to traditional asset classes since the November FOMC meeting, losing nearly 20% of its value in the last month.”
While this latest drop is testing the will of many traders who hope this is just another jolt before the price gets back on its way to the upside, the cryptocurrency analyst and pseudonymous Twitter user “CryptoCapo” offered some hope after to post The following chart compares the current price action to the price drop seen in September.
CryptoCapo said:
“These two corrections are very similar. Same 3-wave movement pattern. Same bottom formation (3 touches). Same negative funding + premium rates. Same bearish divergence hidden before last leg to the downside.”
Looking for a bullish divergence below $ 46,500
Cointelegraph analyst and contributor, Michaël van de Poppe, offered more information on the price action of BTC and public the following graph in which he indicates that “The market is falling as resistance in Bitcoin is rejected.”
van de Poppe said:
“It seems to me that we are looking for a bullish divergence to be created below the $ 46,500 zone so that a reversal is possible.”
This price action is “nothing out of the ordinary”
A final word of reassurance was provided by the market analyst and pseudonymous Twitter user ‘Rekt Capital’, who public the following chart and noted that “BTC generating candles below the weekly support red zone has happened many times in the past (orange circles)”.
The analyst indicated that this recent drop is normal and there is no need to worry too much in the long term.
And he added:
“This kind of downward volatility at these price levels is nothing out of the ordinary.”
The total cryptocurrency market capitalization currently stands at $ 2.152 trillion and Bitcoin’s dominance index is 41.5%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Each investment and commercial movement involves a risk, you must do your own research when making a decision.
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