Bitcoin’s recent price action has been marked by volatility, with a mix of upward and downward moves. Some analysts have interpreted this as a potential pattern development, while others believe that the market is still too volatile to make any definitive predictions.
The Initial Move Down
The initial expectation was for Bitcoin to move downwards to the range of 25,474 to 25,586. This expectation was met, and the price then moved upwards to the range of 25,951 to 26,322. However, the expected push-up to the range of 26,108 to 26,214 did not materialize, leading to a break to the downside.
A Zigzag Pattern or a Flat Correction?
Some analysts believe that this downward movement is part of a zigzag pattern, which is a common pattern in corrective movements. Others believe that it is a flat correction, which is a less common pattern. If it is a zigzag pattern, then the price is expected to move back up to the 26,322 level before continuing its downward trend. If it is a flat correction, then the price is expected to consolidate in the current range before moving in either direction.
Future Price Action
Future price action may involve another five-wave move to the upside, possibly reaching around 26,437. Eventually, a three-wave drop to the downside is expected to complete the pattern. From a daily perspective, the focus is on Wave 3, with expectations of further downside.
Influences on the Market
Bitcoin’s market is expected to remain volatile, influenced by various factors including the FOMC meeting, Gary Gensler’s testimony, and FTX liquidations. The FOMC meeting is scheduled for January 25-26, and it is expected to discuss interest rates and monetary policy. Gary Gensler, the chairman of the SEC, is scheduled to testify before Congress on February 8, and he is expected to discuss cryptocurrencies. FTX, a cryptocurrency exchange, recently liquidated some of its positions, which could have a negative impact on the market.
Technical Indicators
Technical indicators like moving averages and death crosses indicate a bearish outlook for Bitcoin. Moving averages are used to smooth out price data and identify trends. A death cross occurs when the 50-day moving average crosses below the 200-day moving average. This is a bearish signal that suggests the trend is likely to continue downwards.
The Weekly Chart
The weekly chart shows Bitcoin coiling within a descending wedge. A descending wedge is a bullish pattern that indicates a potential bounce to the 28,000-29,000 level in the near future. However, the overall trend is still bearish, and the price is likely to remain below the 200-week moving average in the long term.
Conclusion
Bitcoin’s recent price action suggests a mix of upward and downward moves, with a focus on potential patterns and technical indicators indicating a bearish trend. Traders should be vigilant and consider smaller time frame structures for timing their moves.
