Market sentiment for Bitcoin (BTC) is mixed as the price of BTC fell 10% almost immediately after reaching a record high of $ 19,892 on December 1st.
However, some analysts and fund managers expect the dominant cryptocurrency to rise to over $ 20,000 in the short term. But others insist that there will first be a new correction, as we have seen with previous bulls.
Bitcoin saw a “small” fall of 10%
There are many good reasons to believe that a deeper correction in bitcoin is coming. In the past, many falls from 30% to 40% have been accompanied by significant bullish trends, as was the case in 2017. Thus, Bitcoin’s current correction of around 10% from the new all-time high is relatively small by comparison.
Meanwhile, Mohit Surat, co-founder of Bitazu Capital, claims that Bitcoin may soon enter a major rally in a few months. He stressed that the medium-term outlook for BTC remains very positive, despite the fact that the price failed to overcome the main psychological barrier of $ 20,000 on the first try.
The Bitcoin price was rejected shortly before $ 20,000, which led to a violent reaction from sellers in the spot market. As Cointelegraph reported, network analysts attribute the decline in activity to a group of miners and the sale of whales.
The futures market also suffered from paid spot sales. The derivatives market was already overheating to a decline, reaching $ 23,000 on the Chicago Mercantile Exchange along with a high funding rate for bitcoin futures and a record 95 Fear and Greed.
Since the market was focused on buyers, this meant that in the event of a small decline, the probability of a larger decline due to successive liquidations was high. This fall caused BTC to bounce off the $ 18,000 support zone.
Is Bitcoin at the End of a Serious Hack?
However, some analysts now expect the BTC to exceed $ 20,000 on the next attempt.
In particular, Surout has identified the Relative Strength Index (RSI) in Bitcoin’s monthly chart. It shows that despite the recent up-potential, the RSI is at 69, which is neutral. An asset is overbought if it crosses RSI 75. He said:
“ Miniature, and we can not help but notice that Bitcoin is about to become a very special launch for a few months now.
In addition, this view was supported by a cryptocurrency derivatives trader under the pseudonym Flood. He said that a strong encounter after an illusory encounter at a full-time height is possible. He wrote:
“A false ATH followed by an actual ATH would be a classic. The long awaited BTC 18800 is here. ”
Price adjustment of Bitcoin is still possible
However, other traders believe that the probability of a correction will continue to increase if bitcoin is consolidated below $ 19,000.
Michael Van de Pope, a resident trader at the Amsterdam Stock Exchange, said weak momentum increases the likelihood of withdrawal.
Technically, it can be argued that BTC’s performance has already been overestimated. After the last two minor withdrawals, charts with lower time frames, such as 4-hour and 1-day charts, show that Bitcoin is approaching short-term moving averages or moving averages. This indicates that BTC is not in an overbought zone on lower time frames.
However, on weekly and monthly charts, Bitcoin remains well above its short-term moving averages, indicating that a larger correction is possible.
As the Cointelegraph reported, some traders said that a correction of around $ 13,000 should not come as a surprise for this reason, as previous bulls have shown. If BTC falls further, key support areas should be found at $ 13,000, $ 13,800 and over $ 15,000 on the higher timeframe charts.