Bitcoin price continues to sell off and spillover effect makes altcoins and defi tokens more affected. At the time of writing, BTC price has fallen to a 6-month low and most analysts are not optimistic about an immediate reversal move.
Data from TradingView shows that the sell-off that began late Jan. 20 is continuing today as BTC fell as low as $35,791.
Source: TradingView
Here’s what analysts have to say about the current downturn and what could happen in the coming weeks.
Traders expect Bitcoin to consolidate between $38,000 and $43,000
The sudden drop in bitcoin price prompted many traders to predict various dire outcomes along an extended bear market. However, independent market analyst Rekt Capital believes that all is not lost.
As illustrated in the chart below, Rekt Capital said that “BTC’s recent rejection means that BTC is currently trading at the lower boundary of the current range of $38,000 to $43,100.”
The source: Twitter
According to the analyst, “Bitcoin is only consolidating in the $38,000-$43,100 range but needs to hold this support to avoid a decline into a lower consolidation area.
“Technically, the $38,000 support area is preventing BTC from slipping towards a $28,000-$38,000 consolidation range. Bitcoin last consolidated in this area in Q1 and Q2 of 2021.”
Head and shoulder pattern confirmed
David Lifchitz, Managing Partner and Chief Investment Officer at ExoAlpha, mentioned analyzing BTC price action from a purely technical perspective, noting that the “huge head and shoulders pattern for BTC is now complete, with the neckline broken at $38,300 is”.
Source: TradingView
In theory, Lifchitz notes that this model is forecasting a drop as low as $20,000, but he claims that “the declines are usually smaller” and suggests that “the $31,000 region is definitely there.” could be on the horizon .
From a fundamental perspective, Lifchitz noted that many factors are creating headwinds for BTC, including tightening by the US Federal Reserve, EU regulators looking to ban PoW mining, profit-taking from late 2021, and uncertainty about the economic future in relation on Covid Pandemic.
“Therefore, Bitcoin could certainly see a pullback into the mid-to-low $30,000 region soon as the real dip buyers emerge.”
Traders looking to earn BTC at $30,000
Analyst Michaël van de Poppe takes a look at how traders are reacting to this decline compared to the June 2021 recession He released the chart below, which highlights the key support zones for each period.
“Back in June → People are waiting for $23,000 to $25,000 to buy something. Right Now → People are waiting for $30,000 to buy them. Similar fake breakout to the upside, then erasing all gains only to then slide back to support. ”
The source: Twitter
Last chance for cows
A similar view is held by trader Fomocap, whose chart outlines how BTC could perform in the coming days.
“Reappear to retest $44k-$42k, if rejected slide back to $35k-$33k. What do you think?”
The source: Twitter
A final insight was provided by trader Scott Melker, who posted the chart below, which shows a price breach below a key level in need of a bounce.
“Bulls are looking for a daily close above $39,600. A close below this level (particularly the weekly frame) signals a structural break, lower low, etc. Bears are not holding back.”
The source: Twitter
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