Bitcoin (BTC), which was above $42,000, was consolidated before Wall Street’s opening bell Jan. 7, as more similarities to last years lows emerged.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
BTC mimics May behaviour “very closely”
Cointelegraph Markets Pro and TradingView data showed that a nervous Bitcoin market was beaten by TradingView, as BTC/USD escaped another retest at $40,000 support.
Analysts had earlier warned that the pair could fall further below $41,000 after a brief dip. This could have the potential of bringing it down to $30,000 or lower.
This figure is true for market participants who formed the bottom in a protracted capitulation that lasted from May through July last year.
As now, the Bitcoin bullish momentum was temporarily halted by miner protests and macroeconomic factors.
Rekt Capital, analyst and trader, stated that Bitcoin is closely following May 2021 in a series tweets about current price action.
He pointed out that BTC/USD had broken the 50-week exponential moving mean (EMA) on Friday — similar to the mid-July movement that formed the bottom of the capitulation phase. On the day, the 50-week EMA was at $45,000
The #BTC capitulation event below the blue 50-week EMA is in progress$BTC #Crypto #Bitcoin pic.twitter.com/KGvl2ogbGO
Rekt Capital (@rektcapital), January 7, 2022
Michael van de Poppe, a Cointelegraph contributor, noted the differences between these phases.
This time, a “swift south correction” does not mean that the market is experiencing prolonged sideways movement or a breakout to the upside starting in 2021.
The $46,000 level is still a crucial one to keep an eye on. He stated that if this one breaks, then I believe the bear market or correction is over.
Ethereum trader plans $2,200 buy in
Altcoins also faced trouble that day, after warnings that any strong move previously were likely to be a red flag — which is a bull trap.
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Ether (ETH), which is the largest altcoin market cap by market capital, fell 4.5% to close $3,000 at the time this article was written — down $700 in one week.
ETH/USD 1-day candle chart (Bitstamp). Source: TradingView
Some of the top ten cryptocurrencies in terms of market capital escaped the downtrend with Cardano (ADA), up 1.2% at $1.23, and XRP flat.
Pentoshi, who is still cautious, identified levels as low at $2,200 to buy ETH. He expects it will hit “some time this year.”
Eileen Wilson –Technology and Energy
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