On Sept. 20, the cryptocurrency market was subject to a new round of selling due to global financial markets falling under pressure from fears about Evergrande Group’s possible default. This Chinese-based real estate firm could have a devastating impact on equities markets.
Cointelegraph Markets Pro and TradingView data show that Bitcoin’s early morning selloff intensified into the midday, when the price fell to $42,493 before the bulls were able to bring it back to $43,500.
Chart for BTC/USDT 4 hours TradingView
Fear is rising and there’s uncertainty in the market. Here are the views of analysts about the Sept. 20 price movement and what to expect over the next few days.
The bearish reversal was a warning
The price drop in Bitcoin caught many people off guard, but John Wick, an analyst and pseudonymous user on Twitter, said that the price action leading to Sept. 20’s pullback was a confirmed bearish trend line on the fou-hour chart. This indicated that the move was imminent.
#BTC (4h),#Bitcoin price action had printed Confirmed Bearish reversal bars within a Volatility Squeeze. This setup is either bullish or bearish. This is due to the Evergrade news. Over the next few days, we’ll be able to see how systemic this is. pic.twitter.com/p1ewjHn6bX
— John Wick (@ZeroHedge_) September 20, 2021
According to the trader the drop is due to recent developments regarding Evergrande. This was the first time that Bitcoin’s bearish reversal pattern began to form last week.
It could take several weeks for Evergrande’s developments to unfold and ripple through global financial markets. This indicates that traders could be in for increased volatility.
Traders anticipate a bounce of between $42,000 to $44,000
Crypto analyst and pseudonymous Twitter User ‘CryptoCapo’ provided insight into key levels to monitor. He posted the following chart, which highlights the support zone between $42,000 and $44,000. The lower support zone is at $38,000.
BTC/USD 4-hour chart. Source: Twitter
“I’m betting for a bounce from blue zone. But if it breaks or retests that zone, the green zone will be in play. Both of these are excellent entry prices for the future ($100k +).”).
Related: Why Bitcoin may be safe in the face of a global stock market crash
The market looks oversold now
Scott Melker, a crypto trader and independent analyst in the market, posted the following tweet showing that the price drop has caused a bullish divergence.
$BTC 4-HOUR Bullish divergence overbought with RSI and Up. Overbought (almost), bearish divergence RSI and up. This weekend I was not watching charts, so it went unnoticed. Now that I am oversold, I will be looking for a bullish divergence before considering any other entry. pic.twitter.com/Bpu4CtlFIL
— September 20, 2021, The Wolf Of All Streets (@scottmelker).
Melker highlighted that BTC’s price action on the weekend was a warning sign ahead of Sept. 20,’s pullback. It formed an overbought bearish divergence and its relative strength index, (RSI), declined.
The market is now back to oversold. Analysts are looking for another bullish divergence as a sign that it is safe and secure to re-enter.
The total cryptocurrency market is now worth $1.952 trillion, and Bitcoin’s dominance rate of 42.5%.
com. You should do your research before making any investment or trading decision.
Eileen Wilson –Technology and Energy
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