Bitcoin falls to $36K, traders say bulls need a ‘Hail Mary’ to avoid a bear market

The Bitcoin (BTC), price continues to fall. This is accompanied by a sharper correction in altcoins, and DeFi tokens. BTC’s price is at its lowest in six months, and analysts don’t believe it will recover quickly.

Cointelegraph Markets Pro and TradingView data show that there was a wave selling that started late on Jan. 20, and continued to midday Friday, when BTC reached a low of $36,600.

BTC/USDT 1-day chart. Source: TradingView

Here are some thoughts from analysts about the current downturn as well as what might be in store for the next few weeks.

Expect consolidation for traders between $38,000 to $43,000

Many crypto traders are predicting dire outcomes due to the sudden drop in BTC’s price. Others, such as independent market analyst “Rekt Capital”, aren’t so quick to jump on the bandwagon and declare all is lost.

Rekt Capital’s chart shows that BTC has been rejected. This means that BTC now resides in the lower part of its $38,000-$43,000.100 range.

BTC/USD 1-week chart. Source: Twitter.

Rekt Capital says that “Bitcoin is consolidating within the $38,000-$43,000.100 range,” but must maintain this support level in order to avoid a drop into a lower consolidation range.

Rekt Capital said,

Technically, the $38,000 support zone is what prevents Bitcoin from entering the $28,000-38,000 consolidation range. Bitcoin was last consolidated in this range in Q1-2021.

Confirmed Head and Shoulder Pattern

David Lifchitz (managing partner at ExoAlpha) discussed the technical analysis of BTC’s price action. He pointed out that the “giant head-and-shoulders pattern for BTC has now been completed with the neckline breaking with BTC at $38,300.”

BTC/USDT 1-day chart. Source: TradingView

Lifchitz pointed out that although this pattern suggests a drawdown of as low as $20,000 from a theoretical perspective, he said that it has been more common than that and suggested that “the $31,000 area could be definitely in sight.”

Lifchitz pointed out several factors that are creating headwinds to Bitcoin. These include tightening by the U.S. Federal Reserve and chatter from EU regulators who want to ban proof-of work mining. Profit-taking will also be banned from late 2021. There is also uncertainty over the economic future in relation to the Covid pandemic.

Lifchitz said,

Bitcoin could see a drop to $30,000 soon, before dip-buyers make their move.

Traders are looking to buy BTC for $30,000

Analyst and contributor to Cointelegraph Michael van de Poppe posted the following chart, which shows how traders responded to the drawdown compared to the pullback that occurred in June 2021. The chart highlights the main support zones for each period.

BTC/USD 1-day chart. Source: Twitter

van de Poppe said,

“Back in June, people waited for $23,000 to $25,000 to purchase. Right now, people are still waiting for $30,000 to purchase. Similar fake breakouts on the upside to nuke into support.

Trader and pseudonymous Twitter User ‘Fomocap’ offered a similar viewpoint. He posted the following chart, which shows how BTC might perform over the next few days.

BTC/USD 1-day chart. Source: Twitter

Fomocap stated,

“Relief bounce to $44,000- $42,000 retest, and if rejection then $35,000- $33,000. What do you think?

Related: Crypto Twitter responds: “Ok cool”

Bulls require a close of at least $39,600

Scott Melker, a crypto trader, posted the following chart that shows the price breakdown below the key level that must been recovered.

BTC/USD 1-day chart. Source: Twitter

Melker stated,

“Bulls are looking for a Hail Mary at a close above $39,000. A close below (especially weekly) indicates a change in market structure, lower low, etc. Bears are not tolerant.

The total cryptocurrency market is now worth $1.801 trillion, and Bitcoin is the dominant currency at 40.4%.

com. You should do your research before making any investment or trading decision.

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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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