Summary:
- Bitcoin fell from $41k to $30,300 in less than 48 hours
- This is a drop of over $10k or 26%
- Bitcoin has since rebounded and rejected at the $36,600 price area
- However, $38k could be possible after which Bitcoin’s bullish momentum will slow down
This past week’s weekly close will go down in history as one of the largest drops of Bitcoin since the coronavirus crash of March 2020. Late Sunday found Bitcoin trading at $41k only for the King of Crypto to drop to as low as $30,300 yesterday, January 11th. This drop was a whopping $10,700 decrement in value or a 26% dip in the stated time period.
Bitcoin Gets Rejected at $36,600, Possible Head & Shoulders Forming
At the time of writing, Bitcoin is trading at the $34k price area after an impressive bounce from the local low of $30,300 to $36,600 – Binance rate. The latter price area is acting as stiff resistance and could very much determine the fate of Bitcoin as explained by MagicPoopCannon in the following statement.
BTC has rallied to 36383, which is basically tagging the 36386 level that I mentioned. The initial reaction has been a rejection. So, if BTC can’t surpass that 36386 level, it will greatly increase the chance that BTC will complete the right shoulder of a large head and shoulders.
$38k Possible, then a Slowdown by Bitcoin
Furthermore, the team at Crypterium analytics has forecasted that $38k is possible after which Bitcoin will experience a slowdown. They explained their forecast of Bitcoin as follows.
Bitcoin has now jumped to $35,000. Most likely, today we will see an increase in the $37,500 — $38,000 range. After that, the trend may slow down and it will be necessary to study the chart further in order to understand where the asset may move.
A Decline to $30k or $28k May Occur for Bitcoin
Additionally, their analysis of Bitcoin warns that Bitcoin could drop to $30k or even $28k once it starts to slow down.
It is possible that after that, we will face a decline to the range of $30,000 — $30,500. It is there that you can see a minor trade during the previous growth. A puncture up to $28,500 can occur for a short time. If this happens, there will be many signs for a change from uptrend to downtrend.
Better to Wait and See What Bitcoin Has in Store for the Markets
As highlighted by MagicPoopCannon and the team at Crypterium analytics, Bitcoin is currently experiencing a period of uncertainty after a 26% drop. Therefore, a ‘wait and see’ approach is advised based on the following two factors.
Firstly, being quick to declare a downtrend might result in a situation where institutional investors continue buying the Bitcoin dip. Such a move would reignite Bitcoin’s bullishness. Secondly, Bitcoin could very well have started a correction that will return it to lower levels of even $24k. However, such a scenario will most likely take time as traders and investors come to terms with a possible downtrend after the euphoria that led to $42k.
