Was the $ 39,650 the floor? Bitcoin bulls and bears debate the future of the price of the star cryptocurrency

Was the $ 39,650 the floor?  Bitcoin bulls and bears debate the future of the price of the star cryptocurrency

Bitcoin price quickly rose above $ 43,100 on the US trading day, but uncertainty remains the dominant sentiment among traders on January 11, now the bulls and bears are divided on whether this week’s slide to The $ 39,650 mark marked the bottom for BTC.

Data from Cointelegraph Markets Pro and TradingView show that the price of Bitcoin (BTC) has traded very close to the $ 42,000 level. while the world financial markets digest the statements of the president of the Federal Reserve of the United States, Jerome Powell, on the next changes in fiscal policy.

1-day chart of the BTC / USDT pair. Source: TradingView

Powell indicated that the central bank is prepared to “raise interest rates more over time” if inflation remains high, But analysts were quick to point to other comments suggesting that a low-interest environment could persist for some time.

Traders may have interpreted these comments positively, and while Powell’s comments cannot be linked to direct price movements, BTC achieved a rapid rally above $ 43,000.

Powell said:

“The time has really come for us to move away from those pandemic emergency scenarios and move to a more normal level. It is a long road to normalcy from where we are.”

Here’s a look at the current debate on whether the crypto market is positioned to head higher in the coming days.

Bulls say the floor has already been marked

The cryptocurrency market is well known for its volatility and its history of large declines after setting new all-time highs, a feature featured by the pseudonymous Twitter user, “ChrisBTCbull”.

Was the $ 39,650 the floor? Bitcoin bulls and bears debate the future of the price of the star cryptocurrency
Percentage of decline of the main cryptocurrencies from the highs of 2021. Source: Twitter

This general decline meant that BTC fell almost 40%, while Dogecoin (DOGE) is down 79% from its highs, but according to bullish analysts, the latest technical advances suggest that the market has already reached a bottom.

According to the analyst and Twitter user, Will Clemente III, Bitcoin is “entering the buy zone in the idle flow”, as highlighted in the following idle flow chart adjusted by the Bitcoin entity, which “essentially compares price to spending behavior.”

Was the $ 39,650 the floor? Bitcoin bulls and bears debate the future of the price of the star cryptocurrency
Idle flow adjusted by Bitcoin entity. Source: Twitter

Clemente said:

“This ground signal has only appeared 5 times before in the history of Bitcoin.”

A “death cross” appears

Despite today’s rally to $ 43,100, many analysts are pessimistic about the short-term outlook for Bitcoin and warn that a potential “death crossover” on the daily chart has historically been a strong bearish indicator.

Read:  Bitcoin Reverses 'Bear Market' At $ 53,500 Level As Pfizer Gains On Panic Over Coronavirus Variant 'Nu'

How I know shows next, the 50-day moving average for is dangerously close to falling below the 200-day moving average, a convergence that in the past led to sharp price falls.

Was the $ 39,650 the floor? Bitcoin bulls and bears debate the future of the price of the star cryptocurrency
1-day chart of the BTC / USD pair. Source: Twitter

Bitcoin Archive said:

“Bitcoin is approaching a ‘death crossover’. The last time this happened in June the price fell another 20% in 31 days. That would take us to $ 34,000 on February 9 if this were to repeat.”

As for the altcoin market, the recent weakness in the prices of the USD and BTC pairs was addressed by the analyst and pseudonymous Twitter user “Pentoshi” who posted the following tweet suggesting a more bearish short-term performance for so-called altcoins.

At the moment, traders seem content to wait to see if the cryptocurrency market reverses its course or remains in a range in the near future.

Total cryptocurrency market capitalization currently stands at $ 1.998 trillion and Bitcoin’s dominance index is 40.3%.

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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