On Monday, the price of Bitcoin declined to an intraday low at $45,672. According to analysts, on chain data and technical analysis patterns indicate a serious slump down to $40,000, CoinTelegraph reported. Bitcoin was trading at around $46,000 at the time of writing.
Poor short-term outlook
After the intraday low, Bitcoin’s short-term outlook worsened, a world apart from the weekend’s promising rally above the $50,000 level. Almost 33% from its all time high and with the year almost over, investors are highly likely to be readjusting their expectations of the king of crypto hitting $100,000 before 2022.
Traders with over-leveraged long positions, day traders, and near-term chart watchers are probably very disappointed unless they went short from weekend highs. On the daily timeframe, analysts see the price struggling to distance itself from the tendency of daily lower highs. Traders seem unwilling to buy into recent Bitcoin dips ever since the drop to $42,000 ten days ago. Momentum traders could be waiting for BTC to close above the moving average at $53,000 before deciding on additional long positions.
Bearish outlook for some
Experienced traders will tell you that the price of Bitcoin tends to make head and shoulder, double tops, and M-tops patterns after hitting new all-time highs. Analysts on crypto Twitter have indicated they see signs of a double top. This points to indisputable trend reversal.
Notable price movement patterns
According to analysts cited by CoinTelegraph, a head and shoulders pattern is beginning to emerge. The present dips and subsequent consolidation may form the right shoulder soon, with a neckline at $41,500. They can’t say much more about the existence of a H&S pattern, in particular because a single indicator can’t make a price movement analysis. However, the trend is still noteworthy.
Data from Whalemap, an on-chain analysis outlet, shows the $40,000 level should be one to watch closely. While speaking to CoinTelegraph, analysts at Whalemap said:
Basically, if we start closing daily candles below the support outlined above, we will probably go to a lower one. The closest below us is around $40,000.
Current prices can be great buying opportunity
Admittedly, Bitcoin’s current price movements don’t inspire confidence in traders who purchased it at a higher price to trade in the range of $74,000 to $80,000 in December. However, analyst Mohit Sorout offers some comfort, saying that negative funding phases can and have been a great buying opportunity.
