After the momentum that lifted Bitcoin (BTC), to a high of $50,000, the bulls are back on the defensive. The price dropped below $47,000 on Sunday as a result. Analysts believe that the Dec. 13 pullback was caused by a slight pullback in equity markets and the Federal Open Market Committee’s (FOMC) meeting. Some analysts suggest that a return to the swing low of $42,000 may be possible.
BTC/USDT 4-hour chart. TradingView
Here are some thoughts from analysts about Bitcoin’s current price action and their outlook for the future.
Market pressure is being put on by Fed tapering talks
BTC’s current headwinds are in large part due to regulatory issues in the United States. This was highlighted in a Delphi Digital report, which stated that markets have already reacted to “the latest tightening of global policymakers and Fed tapering.”
Delphi Digital said,
“BTC has lost nearly 20% in the last month, making it one of the worst performing assets relative to other asset classes”
This latest downturn is testing traders’ wills, but CryptoCapo, a cryptocurrency analyst and pseudonymous Twitter User, offered some hope by posting the following chart that compares the current price action with the September price dump.
BTC/USD 4-hour chart. Source: Twitter
“These corrections are very similar. Similar 3 wave movement pattern. Similar bottom formation (3 touches). Same funding+premium negative rates. Similar hidden bearish divergence prior to the last leg down.
You are looking for a bullish divergence lower than $46,500
Michael van de Poppe (an analyst and contributor to Cointelegraph) posted this chart, which shows that the market is falling as Bitcoin resistances are rejected.
BTC/USD 3-hour chart. Source: Twitter
“It seems to me that we are looking for a bullish divergence below the $46.5K level in order to have an eventual reversal.”
Related: The ‘Monster bull movement’ could mean that whales could be responsible for the next Bitcoin price rise
This price action is “nothing extraordinary”
Market analyst Rekt Capital posted the following chart. He noted that “BTC downsidewicking below the red weekly Support Area has happened many times in past (orange circles).
BTC/USD 1-week chart. Source: Twitter
Rekt Capital stated that the recent dip was normal and not something to worry about long-term.
“This kind of volatility at these price levels is not unusual.”
The total cryptocurrency market is now worth $2.152 trillion, and Bitcoin’s dominance rate at 41.5%.
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Eileen Wilson –Technology and Energy
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