It looks like the year-end rally that many crypto traders are hoping for will have to wait until 2022 as Bitcoin (BTC) Bears gained the upper hand on December 28, bringing the price of BTC below the USD 48,000 support.
Data from Cointelegraph Markets Pro and TradingView shows that an early morning sell-off broke BTC support at $ 50,000 and was followed by a second wave in the early afternoon that brought the top cryptocurrency to a daily low of $ 47,318 before the bulls managed to stem the outflow.
BTC / USDT 4 hour chart. Source: TradingView
Here’s a look at what several market analysts are saying about the reasons for this latest correction and what to look for as we move into late 2021.
A bearish RSI divergence before reversing
Options trader and pseudonymous Twitter user John Wick, the sent the following graph shows a bearish “fake-out” as the price of Bitcoin began to reverse.
BTC / USDT 4 hour chart. Source: Twitter
Wick stated:
“We created a double top that was clearly defined by a bearish RSI divergence. Notice how price action moves up as the RSI moves down. We also had a bearish alpha thrust & squeeze fakeout. “
Possible decrease to $ 44,000
Bitcoin’s ongoing battles for the 21-week exponential moving average (EMA) have been highlighted in the chart below by market analyst and pseudonymous Twitter user Rekt Capital. The weekly chart shows the difficulty of BTC in exceeding the technical indicator.
BTC / USD 1 week chart. Source: Twitter
According to Rekt Capital, the price action for Bitcoin resembles a scenario that happened back in May, “with Bitcoin experiencing several weeks of consolidation between the two bull market EMAs,” and the price could soon hit the $ 44,000 level again. He continued:
“In the past, BTC has wicks down into the orange area during this red retest, leaving room for further review of orange.”
Related: Daily bitcoin losses close to $ 4,000 as the S&P 500 hits 69th all-time high in 2021
Waiting for a breakout above $ 52,000
Suggestions as to what traders should watch out for in the coming days and weeks were made by analyst and pseudonymous Twitter user “Don Alt”, the sent The following diagram shows that Bitcoin is in a “pretty clean downtrend for the time being”.
BTC / USD 1-day chart. Source: Twitter
Don Alt pointed out that there isn’t much to see as BTC continues to trade in a range at these current levels. He is now waiting for a clear break above the first red resistance zone on the chart above, which is located at $ 52,000. Don Alt continued:
“Above 52,000 US dollars I get hopeful, above 60,000 US dollars the angry bull market is back. Until both happens, I’ll look for deep wicks and focus on other more exciting things. “
The total market cap of the cryptocurrency is now $ 2.234 trillion and the dominance rate of Bitcoin is 40.3%.
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