The year-end rally many crypto traders had hoped would be delayed until 2022. Bitcoin (BTC), bears, won the battle on Dec. 28, and drove the price of BTC to $48,000 below support.
Cointelegraph Markets Pro and TradingView data show that a wave of selling in the morning broke through BTC support of $50,000 and was followed shortly by another wave in the afternoon, which dropped top cryptocurrency to $47,318 daily before bulls were able to stem it.
BTC/USDT 4-hour chart. TradingView
Here are the views of market analysts on the causes and implications of this latest correction.
Bearish RSI divergence before the reversal
Options trader John Wick posted this chart, which highlights a bearish “fakeout” in Bitcoin’s price correction.
BTC/USDT 4-hour chart. Source: Twitter
“We created a double top, which was clearly defined by bearish RSI diversgence. Notice how the price action trended up while the RSI trended down. Also, we had a bearish Alpha Thrust & Squeeze fauxout.
Possible dip to $44,000
The following chart was created by Rekt Capital, a market analyst. It shows Bitcoin’s ongoing struggles to break above the 21-week exponentially moving average (EMA). This weekly chart illustrates the difficulties BTC has faced in breaking through the technical indicator.
BTC/USD 1-week chart. Source: Twitter
Rekt Capital claims that the Bitcoin price action is very similar to a May scenario, where Bitcoin experienced a multi-week consolidation of the bull market EMAs. The price could soon revert to $44,000. He continued:
“Historically, BTC performed downward wicks in the orange area during this red test so there is scope for another revisit.
Related: Bitcoin daily losses close to $4K as S&P500 hits 69th highest all-time high in 2021
Waiting for a breakout over $52,000
Analyst and pseudonymous user on Twitter, “Don Alt,” offered suggestions for traders to keep an eye out for in the coming days and weeks. He posted the following chart that shows Bitcoin in a “pretty clear downtrend” for the moment.
BTC/USD 1-day chart. Source: Twitter
Don Alt stated that BTC is trading in a narrow range at the current levels and there are not many opportunities. He is currently waiting for a break above the red resistance zone, which is near $52,000 on the chart. Don Alt explained further:
“I feel hopeful above $52,000 and above $60,000 that the bull market is back. I will continue to look for deep wicks, and keep my eyes open for other exciting things until either of these happen.
The total cryptocurrency market is now worth $2.234 trillion. Bitcoin’s dominance rate at 40.3% is also noteworthy.
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Eileen Wilson –Technology and Energy
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