The Bitcoin market took a minor hit in the start of the year, breaking the mighty support zone around $47,000 and reaching the lower support level around $44,000. As we have stated in previous articles of the Bitcoin Price Analysis, the compression and the consolidation effort around $47,000 was going to be released in the short-term future.
The negative scenario was dominant in the current situation as the trading volumes were not sufficient to support a further development above the $50,000 level or towards another bullish path. From a technical perspective, the next support level has been formed around $44,000, between August and September 2021. The $44,000 price level was the bottom line for preparing the market for that uptrend.
The two scenarios that investors will face in front of them in the next days will be:
Last but not least, the negative scenario will include another drop from $44,000 below $40,000, leading the market again in the bearish zone between $32,000 and $40,000. The average on that situation had been around $35,000. The drop below $40,000 will indicate a massive de-investment from the crypto market as institutional investors would have find another source of returns as an alternative in the inflationary crisis. Gold is always an alternate asset in the inflation crisis but cryptocurrencies have made evident that there is space for everyone in this field.
What we expect from this point and on, will depend on the traders’ activity and positions on the long-term market. Institutional investors have several bullish positions on the crypto side and the long-term positioning is always on the bullish side, even if there are minor variances in the price formation.
The moving averages have remained on a bearish formation, bringing more negativity in the market. The trading volumes were similar with a sell-off period, as some investors liquidate their positions and brought more pressure in the support zones.
In the focus view of tis week’s Bitcoin Price Analysis we can observe that the market has been on the “red” for the last 6 days, showing that the correction had started since the start of the year. The “head & shoulders” pattern was not confirmed as there was no support from external factors that could lead the price to higher levels.
We have noticed in previous periods that when the market remains red for more than 6 days, the situation gets more stable in the new price levels. Taking this into account, we expect that the market will remain around $43,000 – $44,000 price levels for the next days until there are more data to exploit and find out more about the new trend.
The consolidation move was also evident in the short-term window, indicating that the market could bring another major move in the next days. The moving averages were crossed several times during the 2 last compression zones, providing some signals for the next trends. We can observe that when there are 2 or more crosses between the moving averages, there is a change in the trend.
When consequent crosses happened in the market, this means that there is more consolidation than expected and we should wait for another change in the trend-setting situation. The expectations will be waiting for another cross in the $44,000 level when a similar pattern could follow the market in a new trend change.
MACD index passed on the “red” area, bringing negative momentum in the price formation. Price formation could be affected from this situation as the negative momentum could slow down the price formation for a rebound in the $47,000 area again.
The RSI index dropped down to value = 31, indicating that a small drawback might become evident in the next days. This drawback will indicate that the market has reached out a local bottom and from that point and on, the expectation will be mostly on the bullish side.
The expectations for Bitcoin have remained stable for now, indicating that a slow transmission from the bearish perspective to the bullish one will be established and there would be a need for massive investing inflows that will fuel the market in the next levels.
The consolidation levels around $47,000 weren’t strong enough to sustain a support zone around this price level. The support levels collapsed and the new support zone was reflected around $44,000, which was the previous zone before the market achieved all-time high levels around $69,000.
The expectations for now and the upcoming weekend is the consolidation around the new support level, that will lead the market in the next stage. A stage that will be determined both from fundamental elements and news stories from the market. Have a great weekend!
Interested in more Bitcoin Price Analysis? Check all here: All Bitcoin Price Analysis
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