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Bitcoin Volatility Grips Traders: Will We See a 20% Rally or Deeper Slump?

IS A 20% BITCOIN RALLY COMING?
IS A 20% BITCOIN RALLY COMING?

Bitcoin’s price action has been a rollercoaster ride lately, leaving traders bewildered and searching for answers. This article delves into the technical analysis and key factors shaping the current trend, offering insights into potential scenarios and trading opportunities.

Red Lights Flash: Bitcoin recently encountered heavy resistance at the crucial 200 Hourly EMA (Exponential Moving Average) at $42,679. This level has historically acted as a wall, triggering significant downward movements after upticks. Further solidifying the bearish picture, Bitcoin set a new lower low despite the previous expected range holding at $41,600. A parallel channel paints a clear downtrend, hinting at further dips before a possible breakout.

Smart Money Talks: Technical indicators whisper the same bearish story. The recent candle closing below the previous swing low signifies a shift to a bearish state, confirmed by the rejection at the 200 EMA and equilibrium level. Even the 1-hour timeframe screams correction, leading traders to anticipate short-term price drops before a potential bounce towards the year-end.

A Glimmer of Hope: A recent bullish divergence did momentarily push prices higher, but it’s crucial to understand that such divergence often acts as a corrective pattern, ultimately leading to further downside movement. However, hope isn’t lost entirely. Nick predicts a potential surge towards $48,000-$52,000 before a deeper correction, a move that could liquidate many short positions.

Eyes on the Horizon: While the near-term picture looks bearish, the weekly timeframe paints a slightly different picture. Resistance is expected around the 702 Fibonacci retracement area, but a pullback towards the $48,000-$52,000 zone remains a possibility.

Don’t Ignore “Sell the News”: A word of caution: major events like the Futures ETF and Bitcoin spot ETF could trigger a “sell the news” scenario, leading to a healthy correction. Key support levels to watch during any potential drops include $36,000, $30,000, $24,000, and $20,000.

Remember the Past: This article draws parallels to previous “sell the news” events, highlighting the difficulty of predicting market tops amidst such hype and uncertainty. For a deeper understanding of “sell the news” events and market dynamics, be sure to check out the accompanying video linked below.

Navigate the Storm: The current bitcoin scenario demands careful navigation. Understanding the technical factors and remaining aware of potential market reactions is crucial for making informed trading decisions. Stay tuned for further updates and analysis as the bitcoin drama unfolds.

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