Predictions Point to a Potential Drop in Bitcoin Value amid Increasing Sell-Off Sentiment
Summary:
Since the approval of Bitcoin ETFs in the US, Bitcoin's price has experienced a $4,000 downturn, indicating an increase in sell-off sentiment. Technical charts suggest that this downward trend might continue. If BTC falls below the 50-day EMA, it could reach a bearish target of $34,850. However, analysts like Crypto Poseidonn predict a steeper fall to the $25,000-30,000 range. The ability of Bitcoin to retain prices above the 50-day EMA will determine whether it can continue its upward trajectory towards $50,000 to $60,000, as predicted by experts.
Since the ratification of Bitcoin spot exchange-traded funds (ETF) in the United States, Bitcoin's (BTC) valuation has slid around $4,000, illustrating a rising trend of market investors selling off their holdings. Technical charts suggest a potential continuation of this decline for the next few days or weeks, but it's uncertain to what extent the value of Bitcoin might fall. The ultimate bearish target is $34,850.
To understand this better, we look at the daily chart of Bitcoin's trend, showing an ongoing consolidation within a positive channel. The red wave represented by the 50-day exponential moving average (50-day EMA) has acted as a support level around the $42,120 mark, with prices hovering above this point as of January 14. The relative strength index (RSI) is nearly at its midpoint, indicating a deficit of powerful bullish forces. Moreover, the RSI forming lower peaks against Bitcoin's ascending peaks is indicative of a rising bearish divergence.
In the likelihood of the BTC price descending below the 50-day EMA, it may find the next support at the bullish channel's lower trendline. This trendline merges with Bitcoin's 200-day EMA (the blue wave) near $34,850, a floor not observed since Q4, 2023.
However, some analysts such as Crypto Poseidonn foresee a drastic plunge in Bitcoin's value to the bracket of $25,000 - $30,000. According to them, recent purchasers have largely acquired BTC within this range. Therefore, as BTC draws closer to $30,000, bankers may start buying from these investors, creating a fresh market floor.
Nevertheless, a fall below $25,000 could enable new institutional entrants to amass even more BTC through leveraging. Analyst Rhaonnor posits that the market has already assimilated the Bitcoin ETF rally, suggesting that the $24,000 - $32,000 bracket should be secure.
Nonetheless, not everyone is in agreement, as market trader il Capo of Crypto envisages this level breaking before the terminal price point of $12,000 is reached. He uses the analogy of the market behavior similar to when the Federal Reserve shifted its stance in the 2004-2007 period.
Whether Bitcoin can sustain its upward progression will depend on its ability to maintain prices above the 50-day EMA. If it does so, we could see BTC escalating towards $50,000 or $60,000 in the weeks ahead, as predicted by financial experts Lucas Kiely and Christos Makridis.
Given the prevailing bullish 'pennant' pattern, a price surge within the $50,000 - $60,000 bracket is likely. This pennant suggests a possible halt in Bitcoin's price at $56,200 by March 2024. Conversely, a break below this pennant's lower trendline would result in the bearish targets as stated earlier.
Please note, the viewpoints expressed henceforth solely belong to the authors and don't necessarily represent the opinions of Cointelegraph.
Published At
1/14/2024 11:49:44 AM
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