What are the scenarios to consider in this bear market after Bitcoin (BTC) plunged more than 12% (-$4,209) yesterday then rallied from $30,000 overnight? Will this support continue as it has in the past?
Bitcoin falls to $30,000
This is the highest level we’ve seen since July 2021. Bitcoin (BTC) has been working its support over the summer until ultimately rising back towards its all-time high (ATH) of $69,000, presenting an uncertain and apprehensive market thus far.
We’re back, but in a totally different economic and political environment. Record inflation rates and a dizzying plunge in traditional markets, set against the backdrop of Ukraine’s war, are disrupting investors and disturbing all certainties in this cryptocurrency industry, where good news have followed one another in recent months.
So, will we be able to replicate the July 2021 scenario, in which the price finally had its final comeback before the ATH? Or are we poised to plummet much worse than we did last summer? Keep in mind that the graph above is on a weekly basis. Because each candle symbolizes a week, each objective we will discuss may take many weeks or even months to achieve.
Technical analysis reflects market psychology. We have photographic confirmation once again since the support at $30,000 has always allowed the price to recoup over the last year. It is a round figure beneath which the price is considered as inexpensive by market participants, and which has always initiated a bullish rise towards a new ATH. As a result, maintaining this level is critical. A comeback would allow us to return to the center of the range at $40,000, and maybe to the top of the range around $65,600.
However, if this crucial closing level is breached by the end of the week, the next level of support will be around $26,000 (Kijun flat), followed by $22,869 (SSB flat). Indeed, the Ichimoku technique allows us to create the next support levels by taking into consideration the flats formed by the Tenkan and Kijun, curves that frequently act as price magnets.
The bearish goals have already been met.
For chart traders, the present level is a take profit level after a bearish breakout. Indeed, the Daily chart provided us with a highly meaningful Bearish Channel, with at least three contact points on each side.
The goal of this chart pattern matched to the height of the channel as reported at the breakout point, and we can see that the current recovery is occurring precisely at this level, which also correlates to the Weekly support already highlighted on the Ichimoku.
So, what are the following actions in the short term? Bitcoin has moved far away from its Daily Tenkan, which is presently around $35,000, as a result of this steep decrease. Because we are now oversold, a retest of this curve should be contemplated (Tenkan and Kijun are far from the price and quite a large gap between them).
In any event, it will be critical to return above the Kijun at $36,400 to reclaim this support, which may now serve as resistance. If the price breaks through the close of $29,740, it may begin to decline again towards the next support at $26,000. (Weekly support).