Bitcoin is off to yet another alarming start after last month’s candle closed erringly bearish. Despite price printing two bullish candles this week, it is still below previous intra-monthly high lows which set it up for a rough week, should the price fail to break above $40,000.
As of writing, Bitcoin is down 15% in the last 30 or so days to $38,214, with altcoins bearing the biggest brunt. Bitcoin’s current price level has thrown pundits into a guesstimating frenzy with multiple scenarios being mapped out.
Peter Brandt, a veteran stock markets trader and CEO of Factor LLC for instance believes that Bitcoin could plunge as low as $28,000 for technical reasons. Bitcoin’s sideways correction spanning from January 22 formed a bearish channel. This pattern is characterized by price pausing during a downtrend. Ideally, as sellers and buyers compete to outdo each other, they create a channel squeeze before the price breaks out lower, confirming the pattern.
Brandt, who had predicted the pattern a few weeks ago is convinced that it was confirmed with the price falling below the lower trendline support at around $40,000.
“The completion of a bear channel typically results in a decline equal to the width of the channel, or in this case, a hard test of $32,000 or so—my guess is $28,000,” Brandt tweeted Sunday.
Pseudonymous Twitter user Rekt Capital believes that price has already entered a high-value demand zone and is primed for a bullish turnaround. Zooming out on the daily timeframe, he notes that the bull market support levels are still holding.
If the price breaks the trendline support, it will most likely turn around within the macro range low ($35,000-$28,000). Further, until the price falls below the macro range low “its premature to state Bitcoin is in a bear market,” Rekt wrote.
Fundamentally, Bitcoin is also sending mixed signals. Albeit the number of unique addresses holding at least 10,000 BTC increased significantly in the past 30 days, traders’ confidence in price regaining $40k seems to be fading as the ratio of transactions in profit seemed to largely outdo those in loss territory Monday.
“If you have been waiting for major price volatility, expect it to continue into Monday and Tuesday as the Fed approaches their may interest rake hike decision” Onchain and crypto social metric platform Santiment further warned on Sunday.
That said, it remains to be seen whether Bitcoin will hold above its current price or rise above the $40,000 psychological level to keep up the steam. After all, Bitcoin is actually doing pretty well right now considering the reds in the equity markets.