The market sentiment around Bitcoin (BTC) is mixed as The price of BTC fell 10%, or 10%, almost immediately, shortly after hitting its all-time high of $ 19,892 on December 1.
But still, Some analysts and fund managers believe that the predominant cryptocurrency will surpass $ 20,000 in the short term. Others, however, firmly believe there will be another correction first, as seen in previous upward cycles..
Bitcoin sees a “minor” 10% drop
There are many compelling reasons to believe that a deeper bitcoin correction is imminent. In the past, the multiple retracement from 30% to 40% accompanied the most important upward trendsas in 2017. Hence BTC’s current correction of around 10% from the new all-time high is relatively small in comparison.
Meanwhile, Mohit Sorout, Bitazu Capital’s founding partner, argues Bitcoin could soon hit a higher multi-month rally. Emphasizes that BTC’s medium-term outlook remains very positive, although its price did not break the key psychological barrier of $ 20,000 on the first try.
Bitcoin price fell just under $ 20,000 due to a strong reaction from sellers on the spot market. As Cointelegraph reported, The chain’s analysts attributed the decline to a combination of miners and whale sales.
The futures market was also affected by the initial cash sale. The derivatives market was already saturated before the drop on the Chicago Mercantile Exchange hit $ 23,000, coupled with an increased BTC futures funding rate and a record index of 95 Fear and Greed.
As the market tilted towards buyers, this meant the following With a small decrease, the likelihood of a large decrease from cascading settlements was high. This led to the crash that caused BTC to bounce off the $ 18,000 support area.
Bitcoin about to have a big breakout?
However, some analysts believe that BTC will be above $ 20,000 on the next try.
In particular, Sorout pointed to the Relative Strength Index (RSI) on Bitcoin’s 1-month chart. Shows, that Despite the recent uptrend, the RSI is at 69 which is neutral. An asset will be overbought if it exceeds 75 on the RSI indicator. He said:
“I’m leaving and can’t help but notice that Bitcoin is about to have a really special monthly rally.”
In addition, a trader in cryptocurrency derivatives with the pseudonym “Flood” repeated this assessment. Said A steep rise after a false all-time high is not unlikely. Wrote::
“The false all-time high, followed by the real all-time high, would be a classic.”
The possibility of a BTC price correction remains
Other dealers, but still, I believe the likelihood of a correction would increase further if Bitcoin consolidates below $ 19,000.
Michael van de Poppe, a full-time trader on the Amsterdam Stock Exchange, said that A slowdown in momentum increases the likelihood of withdrawal.
The probability of a correction increases slowly. $ BTC
– Michaël van de Poppe (@CryptoMichNL) December 2, 2020
Technically, one could argue that the surge in BTC is really overwhelming. After the last two minor pullbacks, lower timeframe charts like the 4-hour and 1-day charts show that Bitcoin is closely above the short-term moving averages (MAs). This means that BTC will not be overbought in lower time frames..
But still, Bitcoin is still well above the short-term moving averages on the weekly and monthly charts, indicating that a big correction could take place.
As Cointelegraph reported, this is what some traders have said A correction to $ 13,000 for this reason should come as no surprise, as previous bull cycles have shown. If BTC keeps falling The key areas of support should be at $ 13,000, $ 13,800, and above $ 15,000 on the high-term charts.