Here’s why Bitcoin traders say a drop to $ 38,000 is the worst case

The fallout from the Federal Reserve’s recent hawkish comments about raising interest rates as early as March continued to weigh heavily on the cryptocurrency market on January 6. The Crypto Fear & Greed Index has been reduced to 15 and some traders are lamenting the possible start of a prolonged bear market.

Crypto fear and greed index. Source: Alternative

Data from Cointelegraph Markets Pro and TradingView shows the bears attempted to challenge the lows set on January 5, bringing the price of BTC down to $ 42,439 at the start of the January 6 session.

BTC / USDT daily chart. Source: TradingView

Let’s take a quick look at where analysts think the price might go in the next few days.

Bitcoin could hit a low between $ 38,000 and $ 40,000

According to Mike Novogratz, CEO of Galaxy Digital Holdings and a staunch cryptocurrency advocate, this latest drop “has been low volume” and highlighted that there is “huge institutional demand on the sidelines.”

As to whether or not Novogratz sees current market conditions as a good buying opportunity, the experienced trader told CNBC that “he is waiting a bit longer to buy crypto” and suggested that the market ” will be volatile over the next few weeks “.

Novogratz said,

“Bitcoin could find a bottom between $ 38,000 and $ 40,000.”

BTC tries to establish a lower

A closer look at the recent BTC price action has been offered by crypto analyst and pseudonymous Twitter user Rekt Capital, who job the following chart comparing current market conditions to those seen the last time the price of BTC fell below its 50-day exponential moving average (EMA).

1 week BTC / USD chart. Source: Twitter

According to Rekt Captial, BTC “has deviated below the 50 blue EMA” and is now trying to fix a new low (HL) as represented by the green dotted line.

Rekt Capital said,

“In May 2021, BTC also formed a low (orange) deviating below the 50 EMA. BTC initially held the HL, but it was also common to go below it.

Based on the circled section provided on the chart above, Rekt Capital is considering the possibility of BTC falling into the $ 40,000 range.

Related: Bitcoin Price Bounces To $ 42,000 As Order Book Imbalance Goes ‘Crazy’

The BTC price is in the “golden pocket”

A final analysis highlighting the critical junction in which the market finds itself has been provided by independent market analyst Scott Melker, who job The following chart shows BTC trading between the 0.65 and 0.618 Fibonacci retracement levels.

1 day BTC / USD chart. Source: Twitter

According to Melker, this beach is known as the ‘golden pocket’ and ‘is considered the most viable place for an asset that is too long or short and is looking for a reversal’.

Melker said,

“The price is currently in the golden pocket of the move from $ 28,600 to $ 69,000.”

The overall cryptocurrency market capitalization now stands at $ 2,077 trillion and Bitcoin’s dominance rate is 39.5%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.



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