Bitcoin Price Falls $1,400 in One Week — Is the Bear Market Back?

This week the equity markets experienced their worst calendar week in 12 years and as this meltdown took place the crypto market place also took a hit.

Bitcoin (BTC) and the cryptocurrency marketplace saw a significant selloff this calendar week and this outcome is relatively reasonable given that people sell their assets out of fear of potential economic instability. Other safe-haven assets like gold and silver too saw a massive selloff on Friday.

Are the crypto markets going to find support in the coming weeks, or volition nosotros see a continued downtrend in momentum?

Crypto market daily performance. Source: Coin360

Selloff ensues after Bitcoin lost cardinal support at $ix,400

The cost of Bitcoin found resistance at the $x,400 level, after which a test of the $9,400 support was heavily needed. The $ix,400 level was unable to provide sustainable support and as the toll fell through it this caused a significant selloff throughout the crypto market place.

BTC USDT daily nautical chart. Source: TradingView

The sell-off led to the side by side support area at $8,200-8,400 and many horizontal levels are lining up here, providing potential temporary support and space for a relief rally.

However, for the short term, many believe that the up momentum is out of the markets as the toll of Bitcoin is making a lower low (a key indicator for downward momentum) on the daily timeframe.

Does this mean that the entire crypto market will reverse form and enter a surly tendency? Not at all. The price of Bitcoin is withal 27% higher as on the 1st of Jan, which makes Bitcoin i of the best-performing assets of the twelvemonth.

Weekly chart brings focus to the 21-Calendar week MA

BTC USD 1-week chart. Source: TradingView

The weekly chart is currently resting on an exciting MA (Moving Boilerplate), namely the 21-week MA. The previous bull wheel held this level as support towards the bull summit in December 2022, which makes this an interesting indicator for bulls to hold on to.

If the price could find back up at this level, it could mean a continuation of bullish momentum in the coming period.

BTC USD 1-calendar week chart. Source: TradingView

The weekly chart also conspicuously shows the massive selloff of the past week. Notwithstanding, it's currently resting on potential back up. Holding the green zone around $viii,400 would line up with the 21-WMA and perhaps grant a relief rally.

For sustained up momentum, it's crucial that a breakthrough of the past high at $10,400 takes identify but such a move could take some time. The market must find back up earlier these levels can be targeted.

If Bitcoin price can't notice support at $8,400, the adjacent level to target is at $7,500-$7,700.

Total market capitalization searches for support

Total market capitalization cryptocurrency chart. Source: TradingView

The total market capitalization for cryptocurrencies was unable to break above $300 billion and too couldn't find support at $250 billion and so further downwards momentum was expected.

Currently, an exciting level is approaching equally the 21-WMA is also showing up on this nautical chart. Through the whole bull cycle of 2022-2017, the 21-WMA granted support on the full market capitalization equally a whole. Providing support in this area would give bulls arguments for upwards momentum.

Aside from the 21-WMA, a crucial horizontal level can be seen here. During 2022 and 2022, the market capitalization found back up at the $225 billion level several times. Showing support here would grant potential upward continuation, as the total market capitalization had been making higher lows since the lesser in December 2022.

Are altcoins close to bottoming out?

Total altcoin cryptocurrency market capitalization chart. Source: TradingView

The altcoin market capitalization shows a similar outlook as the residue of the market. There was a massive rejection at the horizontal level at $115 billion, through which the altcoins are searching for back up too.

The adjacent significant level is plant effectually $73-$75 billion, which is similar to the $225 billion of full market capitalization. Since the bottom in December 2022, altcoins have been consistently made college lows, warranting a new upward trend to occur. Finding back up effectually the $73 billion levels would warrant another higher low and potential continuation upwardly.

The bullish scenario for Bitcoin

If the scenario turned bullish, a relief rally towards $9,200-nine,400 would exist the beginning step. To exercise this, Bitcoin price needs to find back up at $8,250-$8,400 in order to sustain some upwards momentum to retest previous back up levels for resistance.

BTC USD 12-hour bullish scenario nautical chart. Source: TradingView

The side by side important question investors volition enquire will be: Can Bitcoin price break through the resistance and continue its upward momentum? If the answer is no, a likely retest of the $8,200-$8,400 expanse is next to occur.

However, breaking the resistance effectually $9,200-$nine,400 and making information technology back up would open up the door for a motility to the next levels near the $10,400 highs of 2 weeks ago.

And finally, finding support effectually this surface area would confirm the 21-WMA to be supported again, which is a massive indicator for bull/conduct momentum.

The bearish scenario for Bitcoin

BTC USD iv-hour chart. Source: TradingView

There's no clear guideline for a bearish scenario at this indicate, but the chart is showing several perspectives. What traders should look for are potential bearish retests. If the price of Bitcoin rallies upwards without any volume and rejects at $viii,950 or fifty-fifty $9,175, a bearish retest is confirmed, and the toll should trend further downwards.

If such a surly retest occurs, the price volition probable retest the support around $8,200-$viii,400 i more time.

However, the more support gets tested, the weaker it becomes. Heavy retests of this support would typically induce farther continuation downwards to $7,500-$vii,700 as the adjacent main support after this zone.

The views and opinions expressed here are solely those of the author and practise not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. Y'all should conduct your ain research when making a decision.

Source: https://cointelegraph.com/news/bitcoin-price-falls-1-400-in-one-week-is-the-bear-market-back

Posted by: elliottlizintacer1944.blogspot.com

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