1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDEvN2UxZjY5NjUtZmU5My00ZDAyLWFkNjYtM2VhMDViNTNmZjMyLmpwZw.jpg

Bitcoin falls to $36K, traders say bulls need a ‘Hail Mary’ to avoid a bear market

Bitcoin (BTC), continues to drop in price. The decline in Bitcoin (BTC) is being accompanied by sharp falls in other coins and DeFi tokens. At the time of writing, BTC price has sank to its lowest level in 6 months and most analysts are not optimistic about an immediate turn around. 

TradingView and Cointelegraph Markets Pro show that the wave of selling started on January 20th and continued to Friday afternoon. BTC fell to $36,600

BTC/USDT 1-day chart. Source: TradingView

Here’s a check-in with what analysts have to say about the current downturn and what may be in store for the coming weeks.

Traders are expecting consolidation between $38,000-43,000

A lot of crypto traders predict dire consequences due to the abrupt drop in BTC price. Others like independent market analyst ‘Rekt Capital’, are not so quick to jump the gun and declare that all is lost.

As shown in the following chart posted by Rekt Capital, “the recent BTC rejection means that BTC is now residing at the lower region of its current $38,000-$43,100 range.”

BTC/USD 1-week chart. Source: Twitter.

According to Rekt Capital, “Bitcoin is just consolidating inside the $38,000-$43,100 range,” but needs to hold this support level to avoid dropping down into a lower consolidation range.

Rekt Capital said,

“Technically, the $38,000 support area is what separates BTC from entering the $28,000-$38,000 consolidation range. Bitcoin last consolidated in said range in Q1 and Q2 of 2021.”

Confirmed Head- and Shoulder pattern

Analysis of the BTC price action from a purely technical point of view was touched on by David Lifchitz, managing partner and chief investment officer at ExoAlpha, who pointed out that the “giant head and shoulders pattern for BTC is now completed with the neckline broken with BTC at $38,300.”

BTC/USDT 1-day chart. Source: TradingView

From a theoretical standpoint, Lifchitz noted that this pattern predicts a possible drawdown as low as $20,000, but he stated that the “fall has generally been less than that” and suggested that “the $31,000 region could definitely be in sight.”

Lifchitz looked at the basic principles of Bitcoin from an expansive perspective. He noted that there are many factors that are causing headwinds, including tightening at the U.S. Federal Reserve, chatter coming from EU regulators trying to ban proof–of-work mining and profit-taking starting in late 2021.

Lifchitz said,

“Therefore for Bitcoin, a move down to the low-mid $30,000 could be definitely in the cards soon before real dip-buyers show up.”

BTC is being sought by traders to be purchased for as low $30,000

A look at how traders have responded to this drawdown as compared to the pullback in June of 2021 was provided by analyst and Cointelegraph contributor Michaël van de Poppe, who posted the following chart highlighting the major support zones for each period of weakness.

BTC/USD 1-day chart. Source: Twitter

van de Poppe said,

“Back in June → People are waiting for $23,000 to $25,000 to buy. Right now → People are waiting for $30,000 to buy. Similar fake breakout on the upside to nuke afterward into support.”

A similar point of view was offered by trader and pseudonymous Twitter user ‘Fomocap’, who posted the following chart outlining how BTC could perform in the days ahead.

BTC/USD 1-day chart. Source: Twitter

Fomocap

“Relief bounce to $44,000 – $42,000 retest, if rejection then $35,000 – $33,000. What do you think?”

Related: Crypto Twitter responds to Bitcoin dump: ‘Ok cool’

A bull requires a closing of $39,600

Scott Melker (crypto trader) provided the final insight. It shows how price structures below critical levels must be restored.

BTC/USD 1-day chart. Source: Twitter

Melker claimed:

“Bulls looking for a Hail Mary close above $39,600 on the daily. Closes below $39,600 (especially on a weekly basis) indicate a shift in the market structure or lower low, among other things. Bears showing no mercy.”

The overall cryptocurrency market cap now stands at $1.801 trillion and Bitcoin’s dominance rate is 40.4%.

These opinions and views are those of the author and may not reflect those at Cointelegraph.com. Risk is inherent in every trade or investment. Always do your homework before you make a purchase.

Leave a Reply

Your email address will not be published.