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Bitcoin Price Analysis: The Bears Have Finally Take Over the Market…

A sudden drop in Thursday evening (US time zone) has brought the Bitcoin market in the bearish area, breaking the mighty $40,000 price level and reaching $39,000 for some hours.
Bitcoin Price Analysis: The Bears Have Finally Take Over the Market…

Bitcoin Price Analysis: BTC / USD – General Overview

A sudden drop in Thursday evening (US time zone) has brought the Bitcoin market in the bearish area, breaking the mighty $40,000 price level and reaching $39,000 for some hours. As the bearish investors are looking to get off more Bitcoins the bulls are not ready to increase their positions.

 

The market will face two scenarios from this point and on:

 

  • The first scenario will stand for an instant reaction in the market that will drive the price again above the $40,000 level, confirming the prediction that the bearish is on its last stands and the running expectations for another bullish cycle on the process. The quick reaction will be a positive signal for the market as it shows that there is enough market depth for another bearish trend. The possibilities for a reaction move are based on the fact that the $38,000 point served as a resistance point in late July 2021.
  • The second scenario will be a bearish continuation, that will finally lead the price to a standing point at $35,000. This point was the average indicator for the standing zone between $32,000 and $40,000. A return in the $35,000 zone will erase the semi-annual profits for 2021 and mark another return at previous bearish levels.

 

The main bearish scenario in the current situation will be a similar pattern that evolved in summer 2021, when the price was swinging between $40,000 and $32,000, with multiple efforts to escape from that. Back then, strong support from institutional investors made some brave movements and took the main bullish positions that lead the market to new all-time high levels.

 

The expectations have made a bearish turn and there would be a need for a turn in the market momentum. Bitcoin’s price has been less sensitive in this aspect over the years but this remains an important factor for the short-term changes.

 

The trading volumes didn’t exceed the average positions for everyday trading but this was enough to confirm the bearish expectations in the Bitcoin market. Another major change in the trading volumes will be enough to change the momentum in the market and make the bulls run again.

 

The moving averages are still at a bearish position, before trying to cross each other, indicating that the market uptrend will be postponed for now.

 

Bitcoin / US Dollar - General Overview
Bitcoin / US Dollar – General Overview in Bitcoin Price Analysis, image from Tradingview

Bitcoin / US Dollar – Short Term Overview

As we have stated in previous articles, the parallel channels will soon break out, forming a new position. This time, the majority of investors entered the bearish formation, dropping the price down to $39,000. Avoiding a quick reaction in the Bitcoin market will enable the investing positions to enter another consolidation movement around $39,000 or even lower, around $35,000, which was a previous consolidation point.

 

As we have seen in the chart above, the bearish market was established after multiple steps that bulls were trying to hold any position (unsuccessfully) and falling again in the next bearish step. If we observe the last months regarding price falls, the steps will enable better positioning in the next trends.

 

Bitcoin / US Dollar - Short Term View
Bitcoin / US Dollar – Short Term View Bitcoin Price Analysis, image from Tradingview

Bitcoin price Analysis: BTC / USD – Day Trading Overview

The most exciting part of the recent price fall was the day trading window. The $41,500 point became an unusually consolidating point for several hours, which was an uncommon pattern for the 4-hour window. After this minor consolidation, the price jumped above $43,000 and the instant bearish reaction made the price drop to $38,500.

 

This volatility will probably continue for the next hours or days, letting the price float in more swings and create profitable opportunities either by short-selling or from normal positioning. The trading volumes were much higher in the correction hours but this was something to be expected.

 

The volatility would be a definite game-changer in the current situation, proving that there are major implications in the price development from time frame to time frame. The bearish situations should be explored as a short-term opportunity to exploit some minor moves, that could not be held forever.

 

Apart from that, long-term investors might find a perfect time to implement a Dollar Cost Average strategy to increase their portfolio value in the long-term positioning. As we have seen multiple times in the crypto space, the long-term positions are always profitable and can bring better opportunities for those investors.

 

Bitcoin / US Dollar - Day Trading View
Bitcoin / US Dollar – Day Trading View Bitcoin Price Analysis, image from Tradingview

Bitcoin / US Dollar – Indicators

MACD index turned to “red”, for the first time during the last week. This turn means that the Bitcoin market will bring slower speeds in the price development and a potential downtrend for the next days. As we stated before, momentum could play an important role in the next phases as the market will try to evolve at higher levels.

The RSI index turned again below value = 30, showing that this “dip” might be another excellent opportunity for long-term investors to place more positions in their portfolios and get ready for the next cycle. Some investors are expecting a minor reaction move towards higher levels and this can be confirmed from a technical perspective.

 

Bitcoin / US Dollar - Indicators
Bitcoin / US Dollar – Indicators View, Bitcoin Price Analysis, image from Tradingview

Conclusions

This bearish turn in the Bitcoin market formation was a sudden event, as a result of a breakout from the parallel channels. The bearish trend has been established now and the next price movements will take into consideration the bearish feeling.

 

The expectations have been mild for now but some investors are already looking to buy the “dip” and form more market depth around those price levels. The next days will reveal if the bears are here to stay or the bulls will take up the market and react immediately. The fight has just started!

 

Read our previous Bitcoin Price Analysises here!

George Foroglou

George Foroglou

George Foroglou heard first time about Bitcoin in a Christmas dinner in December 2013. As Finance student, he published articles regarding Bitcoin adoption, blockchain applications and IoT monetization strategies. From 2017, he is an active trader in the Bitcoin and other altcoins market, using mostly Technical Analysis. He has worked for plenty web portals, giving insightful articles about technical and fundamental analysis.

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