Look out below! Analysts eye $40K Bitcoin price after today’s dip to $45.7K

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On December 13, Bitcoin’s short-term outlook worsened after the price fell to a low during the day of $ 45,672, far from a promising weekend rise above the $ 50,000 limit.

As the year draws to a close and the all-time high is around 33%, traders are likely to adjust their forecasts and push BTC’s $ 100,000 target slightly in 2022.

Daily indicators for the cryptocurrency market. Source: Coin360
Day traders, four-hour chart watchers and over-leveraged longs (unless they sold out for $ 50,000 over the weekend or due to weakness this morning) are likely to be put off, but let’s go a little further and see how the price goes. Bitcoin.

BTC / USDT daily chart. Source: Trading View
On the daily chart, we see the price struggling to break out of the trend of daily lower peaks, and apart from the fall of December 4 to $ 42,000, traders seem to be on guard against buying the latest falls.

Tracking moving averages has always been a relatively easy way to trade BTC fluctuations, and the 20-day moving average (MA) (blue) is currently below the 50-day moving average (orange). Some traders simply buy when an asset yields multiple daily bars above 20-MA and sell when the price breaks lower, as this is a sign of a weak short-term trend.

Following this practice, momentum traders can wait until BTC closes above the $ 53,000 moving average before entering new long positions. Risk-averse traders may consider the expectation of a convergence between 20 and 50 MA as a clearer trend reversal signal. A quick look at the price action over the past year shows that this strategy is very effective.

Why some traders expect further decline
More experienced traders know that the price of bitcoin tends to form double peaks, M-peaks and head and shoulder patterns after reaching new all-time highs. Recently, crypto-twitter analysts have pointed out what they see as a double top, a clear pattern of trend reversal.

BTC / USDT daily chart. Source: Trading View
When we look at the daily chart, we can begin to see what looks like the beginning of a head and shoulder pattern. The current falls and the subsequent consolidation may eventually complete the right shoulder with a $ 41,500 neckline and a price target near an incredibly low number that will not be written here.

Traders will also notice that the neckline of the aforementioned head and shoulder pattern coincides with a large gap in the Volume Profile Visual Range Indicator (VPVR), which shows increased buying interest at the $ 40,000 level.

At this point, it is too early to make much noise about the existence of the H&S pattern, especially since price action analysis cannot be determined by a single indicator, but it is still worth noting.

Whalemap online analytics data also points to the $ 40,000 level as an area to keep an eye on. Whalemap analysts told Cointelegraph:

“Basically, if we start closing daily candles under the support shown above, we will most likely switch to a lower candle. The next minimum for us is around $ 40,000.”
While Bitcoin’s current price performance does not inspire much confidence in traders who have either bought a higher price or expected it to trade in the $ 74,000 to $ 80,000 range in December, analyst Mohit Surut recently noted that passive financing rounds prove to be good shopping opportunities. possibilities.

Also oversold on the daily time frame are moving average convergence-divergence (MACD) and Relative Strength Index (RSI), both of which have historically indicated accumulation phases and good opportunities for the average value of the dollar in new long positions.

Source: CoinTelegraph

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