It seems like the bear market is creeping in currently in the crypto market as Bitcoin drops to new lows of $36,000. Some of the leading analysts now want a “Hail Mary close above $39,600” to avoid a bearish shift in the market structure of the leading crypto.
For now, Bitcoin continues to sell-off and the knock-on effect is an even steeper correction in the altcoins and decentralized finance (DeFi) tokens. At the time of publication, Bitcoin has already dropped to its lowest in six months and many analysts are not convinced that there is an immediate turnaround coming in the near term.
Data acquired from TradingView shows that a wave of selling that started late in the day on January 20 continued into midday on January 21 when Bitcoin hit a low of $36,600. Since then, the flagship crypto has dropped below $36,000 and is struggling to get back up.
Here are some of the opinions of popular analysts about the current bearish trend and what may be coming in the weeks ahead.
Bitcoin Consolidation Between $38,000 And $43,000
The sudden steep plunge in Bitcoin has many of the traders projecting some severe outcomes along the line of a persistent bear market. Others like ‘Rekt Capital’ are not quick to jump the gun and declare that everything has been lost.
As shown in the chart posted by Rekt Capital:
“The recent BTC rejection means that BTC is now residing at the lower region of its current $38,000-$43,100 range.”
Rekt Capital said that “Bitcoin is just consolidating inside the $38,000-$43,100 range,” but has to maintain that support level to avoid plunging into a lower consolidation range. The analyst added:
“Technically, the $38,000 support area is what separates BTC from entering the $28,000-$38,000 consolidation range. Bitcoin last consolidated in said range in Q1 and Q2 of 2021.”
Head And Shoulders Pattern Now Confirmed
From a technical point of view highlighted by managing partner and chief investment officer at ExoAlpha, David Lifchitz:
“The giant head and shoulders pattern for BTC is now completed with the neckline broken with BTC at $38,300.”
Theoretically, Lifchitz said that the pattern projects that there is a possible drop that might push bitcoin to around $20,000. However, he said that such a “fall has generally been less than that” and suggested that “the $31,000 region could be in sight.”
From a fundamental angle, Lifchitz said that many factors creating headwinds for bitcoin like the tightening from the United States Federal Reserve, profit-taking from late 2021, chatter from the European Union regulators looking to ban proof-of-work mining, and the continued uncertainty about the economic future as it relates to the pandemic.
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“Therefore for Bitcoin, a move down to the low-mid $30,000 could be definitely in the cards soon before real dip-buyers show up.”
Traders Want To Buy Bitcoin At $30,000
A review of the way traders have responded to the drop compared to the pullback in June 2021 was shown by analyst Michaël van de Poppe, who posted this chart showing the major support zones for every period of weakness.
“Back in June → People are waiting for $23,000 to $25,000 to buy. Right now → People are waiting for $30,000 to buy. Similar fake breakout on the upside to nuke afterward into support.”
A similar opinion was given by trader and pseudonymous Twitter user ‘Fomocap’. Fomocap posted this chart focusing on how BTC may perform in the coming days.
“Relief bounce to $44,000 – $42,000 retest, if rejection then $35,000 – $33,000. What do you think?”
Bulls Wish For A Close Above $39,600
A final data and analysis into the bitcoin market were given by trader Scott Melker. He posted this chart that shows the price breakdown below a critical level that needs to be recovered quickly.
“Bulls looking for a Hail Mary close above $39,600 on the daily. A close below (especially on weekly) is a break in market structure, lower low, etc. Bears showing no mercy.”
The general crypto market capitalization is below $1.8 trillion and Bitcoin’s dominance rate is 40.5%.