Watch below! Analysts envision Bitcoin price of $ 40,000 after today's drop to $ 45.7,000

On December 13, Bitcoin’s near-term outlook deteriorated after the price fell to an intra-day low at $ 45,672, a far cry from the weekend...


On December 13, Bitcoin’s near-term outlook deteriorated after the price fell to an intra-day low at $ 45,672, a far cry from the weekend’s promising rally above the $ 50,000 level.

With the year almost over and all-time highs near 33%, traders are very likely to readjust their expectations and push back the $ 100,000 BTC target a bit further into 2022.

Daily performance of the cryptocurrency market. Source: Coin360

Day traders, four hour chart watchers, and long over-leveraged people are probably freaking out (unless they’ve gone down from $ 50,000 over the weekend or this morning’s weakness), but let’s zoom out a bit to see where the price of Bitcoin is.

BTC / USDT daily chart. Source: TradingView

Over the daily period we can see that the price is struggling to deviate from the trend of the daily highs and lows aside from the December 4th drop to $ 42,000 traders seem to be concerned about buying into the lows. the most recent.

Tracking moving averages has always been a relatively straightforward way to balance BTC trading and currently the 20 day moving average (MA) (blue) is lower than the 50 day MA (orange). Some traders simply buy when an asset secures a few daily close above the 20-MA and sell when the price drops below as this is a sign that the short term trend is weakening.

As a result of this practice, momentum traders could wait until BTC secures a daily close above the moving average at $ 53,000 before opening new long positions. More risk averse traders might consider waiting for the 20-50MM convergence as a clearer sign of a trend reversal. A quick glance at the last year of price movements proves that the strategy is quite effective.

Why some traders expect more decline

More experienced traders know that the price of Bitcoin tends to make double highs, M-highs, and head and shoulder patterns after hitting new all-time highs. Lately, Twitter crypto analysts have been highlighting what they perceive to be a double top, which is a clear trend reversal pattern.

BTC / USDT daily chart. Source: TradingView

Looking at the daily calendar, we can start to see what the start of a head and shoulders pattern looks like. The current dips and subsequent consolidation could eventually complete the right shoulder, with a neck line at $ 41,500 and a price target near a number so incredibly low it won’t be written here.

Traders will also notice that the neckline of said head and shoulder pattern lines up with a wide deviation on the Volume Profile Visible Range Indicator (VPVR), which shows increased buying interest at the 40 level. $ 000.

At the moment, it is too early to make too many fuss about the existence of an H&S model, especially since a price action analysis cannot be determined by a single indicator, but it is is still something to note.

Data from a chain analytics outlet, Whalemap, also identifies the $ 40,000 level as an area to watch closely. Speaking to Cointelegraph, analysts at Whalemap said:

“Basically if we start to close the daily candles below the support described above we will likely go lower. The closest below us is around $ 40,000.

While the current Bitcoin price action hardly inspires confidence in traders who bought a higher or expected price to trade in the $ 74,000- $ 80,000 range in December, analyst Mohit Sorout recently pointed out that the phases of negative financing have turned out to be excellent buying opportunities.

Over the daily period, the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) are also oversold, both of which have historically indicated phases of accumulation and good opportunities for the dollar’s average cost in the near future. new long positions.

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.