Bitcoin dips below $42K as new forecast says breakout ‘most probable outcome’ for BTC price

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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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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