Analysts warn that possible downside wick could push BTC price down to $ 44,000

It looks like the year-end rally that many crypto traders were hoping for will have to wait until 2022, like Bitcoin ( BTC ) the bears to...


It looks like the year-end rally that many crypto traders were hoping for will have to wait until 2022, like Bitcoin (BTC) the bears took the upper hand on December 28 and knocked the price of BTC down below support at $ 48,000.

Data Cointelegraph Markets Pro and TradingView shows that an early morning selling wave broke through BTC support at $ 50,000 and was followed by a second wave in the early afternoon that took the highest cryptocurrency down to a daily low $ 47,318 before the Bulls managed to stem the exit.

4 hour BTC / USDT chart. Source: TradingView

Here’s a look at what several market analysts are saying about the reasons for this latest correction and what to watch out for at the end of 2021.

A bearish divergence in the RSI before the reversal

An overview of the technical reasons for the year-end correction for the BTC price was offered by options trader and pseudonymous Twitter user John Wick, who job the following chart highlighting a bearish “fake out” as the price of Bitcoin began to reverse.

4 hour BTC / USDT chart. Source: Twitter

Wick explained:

“We have formed a double top clearly defined by the bearish divergence in the RSI. Notice how the price action tends to go up, while the RSI tends to go down. We also had a bearish Alpha Thrust & Squeeze fakeout.

Possible drop to $ 44,000

Bitcoin’s continued struggles at the 21-week Exponential Moving Average (EMA) were highlighted in the following chart by market analyst and pseudonymous Twitter user Rekt Capital. The weekly chart shows the difficulty that BTC had to overcome the technical indicator.

1 week BTC / USD chart. Source: Twitter

Bitcoin’s price action, according to Rekt Capital, is similar to a scenario that occurred in May “in which Bitcoin experiences a multi-week consolidation between the two bull market EMAs”, and the price may soon revise the $ 44,000 level. He continued:

“Historically, BTC has performed downward wicks in the orange zone during this new red test, so it’s possible to revisit the orange.”

Related: Daily Bitcoin Loses Nearly $ 4,000 As S&P 500 Hits 69th All-Time High in 2021

Waiting for a break above $ 52,000

Suggestions on what traders should watch out for in the days and weeks to come were offered by analyst and pseudonymous Twitter user “Don Alt”, who job the following chart shows that Bitcoin is in a “pretty sharp downtrend, for now”.

1 day BTC / USD chart. Source: Twitter

Don Alt said there was not much to do with BTC continuing to trade within a range at these current levels. He is now expecting a clear break above the first red resistance zone on the chart above, which sits near $ 52,000. Don Alt explained further:

“I’m starting to have hope above $ 52,000, above $ 60,000, the raging bull market is back. Until any of these happen, I’m going to be looking for deep locks and focusing on other more exciting things.

The overall cryptocurrency market capitalization now stands at $ 2.234 trillion and Bitcoin’s dominance rate is 40.3%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.