For many, it seems as if the fall of Bitcoin is neverending. In fact, prices have been on the decline ever since Bitcoin managed to reach its all-time high prices of USD 64,800. This crypto market crash not only affected Bitcoin, but it affected the entire crypto market. Bitcoin’s dominance is still around 41%, and this didn’t stop the overall market sentiment to follow Bitcoin prices. Today, technical analysts are charting while zooming out and noticing a scary future. Will Bitcoin Price crash towards 20K?
Bitcoin Price Prediction – Bitcoin already Breached 35K
Bitcoin failed to recover effectively from its all-time high price. Usually, when prices are on an uptrend, they tend to quickly readjust and continue upwards. For the case of trend reversals, and specifically for downtrends, this is not the case. See, When prices are in free-fall, they barely adjust for a brief period of time before they continue on their downtrend. Bitcoin’s price behavior is currently doing that exact thing.
What’s also interesting for Bitcoin’s technical price is the importance of the current price area. I figure 1, we can clearly see how throughout the month of January 2021, prices corrected back to the USD 30,000 area after an extended uptrend.
Why would Bitcoin Prices crash to 20K?
It is true that the current Bitcoin price sits around a very strong support area. Looking back at figure 1, we can clearly see support #1 and support #2 lines delimited by prices of USD 30,200 and 34,500 with occasional fakeouts towards USD 28,500. For our analysis to be fully transparent, we would need to zoom in to the 4 hours chart and zoom out to the 1 week chart:
Zooming In: A Downtrend with potential reversal
This is where we see a steady downtrend that is converging with the Support #2. This usually signals a very likely reversal in trends. Seeing that prices are nearing the lower channel, the price rebound looks more likely to happen on this timeframe. Short-term traders should benefit from this setup and open buy orders with tight stop-losses just below support #2.
Zooming Out: A Further CRASH towards 20K
For those who forgot, Bitcoin prices were hugely increasing in value with no adjustment in prices. Back in 2017, the same thing happened, which made offline people (those are people who barely use the internet) hype about Cryptocurrencies. Heck, even my grandpa heard of Bitcoins. This hyped wave quickly toned down as prices adjusted downwards again. Today in 2021, we are witnessing the exact same thing. Many Bitcoin “traders” and “experts” are popping up lately. This is a sign that Bitcoin is ballooning again and a heavy adjustment was inevitable.
Thanks to Elon Musk who made it quicker, it looks like the crypto market is getting rid of hyped people and rookies. Another analysis that analysts are looking at is the 1 Month timeframe of Bitcoin. In figure 3, we can clearly see similarities between 2017 and 2021. Also, this confirms the Bitcoin cycle which is highly talked about in the crypto scene.
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