Bitcoin (BTC), which was close to $40,000, climbed closer to $44,000 on Thursday after the resistance of $44,000 proved too strong for bulls.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
Buy another dip
Cointelegraph Markets Pro and TradingView data showed that BTC/USD lost around 4% over 24 hours Friday.
Before the retracement, the pair had reached $44,450 on Bitstamp. This was a local low of $41,780.
Although disappointing for those who hoped that the worst was over, analysts seemed unsurprised by this move, which they suggested could be resolved via a new test of $40,000 support.
This is the #Bitcoin path. pic.twitter.com/VY0BkTXYOM
— Michael van de Poppe (@CryptoMichNL) January 14, 2022
Pentoshi, a popular trader, also seemed to have his wish. BTC dropped below $42,000 in what was previously considered a prime entry point. He said that $46,000 could be the next step.
However, another “death cross”, chart construction on BTC/USD was looming large. This is a classic warning sign of bearish conditions.
Cointelegraph reported that a death cross is when the declining 50-day average crosses below the 200-day average. Although this is a rare feature, it has not always led to bearish behavior.
BTC/USD 1-day candle charts (Bitstamp), with 50-day and 200-day moving averages. Source: TradingView
The upside conclusion is still possible
Analysts at trading suite Decentrader remain bullish on the mid-term price action and acknowledge that a further dip in the $30,000 to $40,000 range could still occur.
Related: Top or Bottom? Bitcoin traders at odds about whether it will continue rising
They argued that the two-month downtrend since December was prime for disruption in a Friday market update. The upside was likely to overtake a cascade lower.
“We believe that there may be more volatility between $44,000 to potentially $38,000 before we see a breakout. This range is likely to cause additional pain and misery to traders who try to rush major moves before they’re ready,” the update stated.
Decentrader said that it was encouraging to see funding rates becoming more negative over time as sentiment shifted to expecting more downside. This is a good sign, Decentrader noted.
“Considering the current fundamentals and the consistency of the Bitcoin downtrend over the past two months, we believe that a move to the upside is most likely.”
Chart of BTC funding rates. Source: Coinglass
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