Bitcoin is struggling to recover amid a more general market downturn. The leading cryptocurrency fell as low as $41,000 and erased more than $3,500. So what’s next in BTC?
Bitcoin slumped below a strong $45,000 support.
The next critical support zone is between $39,000 and $37,300.
Failure to hold above this level could send Bitcoin to $30,000 or lower.
BTC is struggling to find stable support as bears seem to have taken over. Historical price action shows that BTC must stay above $37,300 to avoid capitulation. You can see the Bitcoin (BTC) price and detailed market data here.
Bitcoin dropped to $41,000! Analysts gave the levels
BTC broke the $45,000 support level and is threatening to drop the market further. At press time, Bitcoin is trading just under $42,000. The Fibonacci retracement indicator, measured from the June 2021 low of $28,750 to the all-time high of $69,000, suggests that Bitcoin will continue its decline. The next critical demand hurdle below the leading cryptocurrency is between $39,000 and $37,300. Such a key area of demand could have the strength to hold, as Tom DeMark (TD) Sequential is set to present a buy signal on the weekly chart.
The bullish formation predicts that around January 17, Bitcoin could enter a one- to four-week rally or a new upward countdown. The buying pressure that can build up over the next two weeks is critical for Bitcoin to regain the 50-day moving average at $50,000 as support and push towards record highs. Not gaining enough strength could be devastating for bulls, as the 100 and 200-day moving averages are the last demand zones below BTC. These key levels are $30,000 and $19,000 respectively, according to analysts.
Analysts warned: BTC could slide to these bottoms!
While a capitulation event may seem impossible given the strong fundamentals behind Bitcoin, the Relative Strength Index suggests otherwise. The RSI seems to have behaved a certain way every time BTC has capitulated since the 2014 bear market. This momentum indicator tends to drop to the 42 level, recover and then break this support base to mark the start of a sell-off.
Similar market behavior has occurred in the last six months. In July 2021, the RSI jumped from 42 to reach 69 in November 2021. The recent rejection pushed the RSI back to 42, which it currently holds. If history repeats itself, it’s reasonable to assume that the capitulation to $19,000 is imminent, according to analysts. While Bitcoin looks set to head lower, the bulls should be prepared to defend the $39,000-$37,300 support wall at all costs. Such an important demand zone could represent one of the last opportunities for BTC to continue its uptrend for a while.