Bitcoin stabilizes at $42K as key moving average break from July reappears

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.

Similar: Survey results for ‘Dip’, ‘Buy’, and ‘Fed’ top social media topics

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.”

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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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