Bitcoin (BTC) fell by another 3.8% on Monday, bringing it further below the $40,000 level. The sell-off was driven by technical indicators as well as broader market sentiment.
A technical analysis of Bitcoin’s price action over the past few days and weeks reveals a number of bearish signs. The price has been rejecting trend lines, and there have been repeated rejections at the $43,750 level. The break of this structure confirms a bearish trend.
Short-Term Corrective Patterns
The short-term corrective patterns also indicate potential further downside. The price is currently testing the support at the $41,500 level. If this support fails to hold, we could see a further decline towards the $30,000 level.
Upside Bounce and Potential Downward Move
Despite the bearish outlook, Nick believes that there could be a bounce back to the upside before a larger corrective move. This is based on the expectation that the price will eventually find support at the $40,000 level.
Bitcoin Spot ETF Launch and Sell the News Event
Investors should also be cautious about the upcoming Bitcoin spot ETF launch. There is a risk that this could trigger a “sell the news” event, which could send the price of Bitcoin lower.
Predictions for Further Downward Movement
Nick is predicting that Bitcoin could continue to move lower until March. This is based on the fact that the price has been trading in a downtrend since May.
Weekly Chart and Potential Further Correction
The weekly chart for Bitcoin shows the first red candle in eight weeks. This could indicate that the price is due for a further correction.
RSI at High Level and Potential Corrections
The relative strength index (RSI) is also at a high level, suggesting that the price could pull back significantly.
Decreasing Volume Profiles and Potential Upward Movement
The volume profiles for Bitcoin are decreasing, which could support the potential for an upward movement in the short term.
The outlook for Bitcoin is bearish in the short term, but there is a chance that the price could find support at the $40,000 level. Investors should be cautious about the upcoming Bitcoin spot ETF launch and should be prepared for further downside movement.
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