2 targets for BTC after crash below $50,000 and subsequent rebound

After a significant fall in the cryptocurrency market, Bitcoin has experienced a sharp decline, breaking through the key support level of its previous major swing at $53,000.

This price movement indicates a possible shift towards a bearish market structure.

Technical Analysis

By Shayan

The daily chart

A close examination of Bitcoin’s daily chart reveals a significant drop driven by widespread fears of potential economic turbulence. Since Friday, increased selling pressure has led to a sharp drop in the price of BTC, causing it to fall below the 200-day moving average at $61.1 million and its previous major swing to 53 thousand dollars.

This breakout is a strong bearish signal, suggesting a potential change in market structure to the downside, as it marks a new lower low on the daily time frame.

This move indicates that sell liquidity, which was below the $53,000 level due to previous long stop-loss orders, has been triggered, triggering a long squeeze event.

With perpetual markets cooling and deleveraging, there is now a greater likelihood of a consolidation phase in the medium term. Therefore, in the coming days, the price of Bitcoin is expected to fluctuate between the levels of $53,000 and $60,000.

Source: TradingVIEW The 4 hour chart

On the 4-hour chart, the intensity of the sell-off is evident as Bitcoin price cascaded through several critical support zones, including the psychological $60,000 level and the crucial $53,000 mark.

However, this sharp drop has effectively wiped out most long positions in the futures market, causing a temporary halt in the bearish momentum as the price reached the lower end of a multi-month wedge pattern around $50,000, causing a slight rebound.

Given the impulsive nature of the recent downtrend, the market may require a short-term correction phase.

The key targets for this correction are within the Fibonacci retracement levels, specifically between the 0.5 ($62K) and 0.618 ($59.5K) levels. In the short term, Bitcoin is likely to remain trapped within the $50,000-$62,000 range, potentially consolidating sideways until the next significant move occurs.

Source: TradingView chain analysis

By Shayan

The price of Bitcoin has experienced a significant decline, struggling to maintain its upward momentum. A key factor behind this recent decline could be selling activity in perpetual markets and a long-running event.

The accompanying chart highlights funding rates, a crucial metric for gauging sentiment in the futures market. This metric shows whether buyers or sellers are executing more aggressively (buy orders) in general. Positive funding rates indicate bullish sentiment, while negative rates suggest bearish sentiment.

Funding rates have fallen sharply recently, indicating that the decline was driven by aggressive short selling and the liquidation of many long positions.

Funding rates have turned negative, reflecting general bearish sentiment and the dominance of short sellers. However, this could also be seen as a positive sign as it suggests that the futures market is no longer overheated. This scenario could create conditions for a more sustainable uptrend in the coming months, provided there are no drastic changes.

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