Credit: Original article published by Bitcoinist.

A strong downside correction in the Bitcoin market seen earlier this week is threatening to become a full-fledged bear trend as BTC/USD struggles to move past certain technical resistances.

Many traders agree that the pair could continue its move lower, forming a potential Head and Shoulder pattern, a bearish reversal structure. As Bitcoinist covered here, the pattern’s technical downside target is below $20,000, a move that would take Bitcoin down by more than 50 percent from its record high near $42,000 established on January 8.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin struggles to move past $35,000. Source: BTCUSD on TradingView.com

Other potential bearish indicators come from the macroeconomic landscape. The brighter US growth prospects challenged assumptions about a longer US dollar bear market. After finishing 2020 down by 6.76 percent, the greenback recovered by 1.2 percent in the first week of 2021, forcing analysts to rethink their long-term bearish bias.

That stopped the Bitcoin bull run midway also as traders decided to secure their profits at local tops. Now, a deeper price correction is witnessing limited over-the-counter deals, minimal stablecoin inflow into exchanges, and an increase in miners-led sell-off—all pointing to a bearish continuation in the Bitcoin market.

Bitcoin, cryptocurrency, BTCUSD, BTCUSDT

Bitcoin Outflow from Coinbase Pro wallets declines, pointing to fewer OTC deals. Source: CryptoQuant

However, one analyst believes that is not the case.

Ki-Young Ju, the chief executive officer at CryptoQuant — a blockchain analytics firm in South Korea, asserted that the BTC/USD exchange rate would not fall below $28,000.

“There are many institutional investors who bought BTC at the 30-32k level,” Mr. Ju said. “The Coinbase outflow on Jan 2nd was a three-year high. Speculative guess, but if these guys are behind this bull-run, they’ll protect the 30k level. Even if we have a dip, it won’t go down below 28k.”

Technicals Back Bitcoin Bulls

More seasoned analysts support a potential Bitcoin price pullback as the cryptocurrency traded 16 percent higher from its local low near $30,000.

One independent chartist said the BTC/USD exchange rate would not slip below $32,000 based on technical support that lingers around the level. The pseudonymous entity presented the pair inside a Symmetric Triangle pattern, confirmed by at least two reactive tops on a downward sloping trendline and two reactive lows on an upward sloping trendline.

Bitcoin trade setup, as presented by Rekt Capital. Source: BTCUSD on TradingView.com

“Bitcoin isn’t going any lower than $32,000 as long as the uptrend line continues to hold,” the analyst stated, putting the cryptocurrency’s potential upside target near the downtrend line—that is above its previous record high near $42,000.

This article is strictly for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. CryptosOnline.com does not provide investment, tax, legal, business or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any loss or damage caused or alleged to be caused by, or in connection with, the use of or reliance on any content, goods, services or opinions mentioned in this article.

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