Bitcoin price is predicted to rise as high as $45,000 and then settle at around $40K. This bullish prediction comes from an analyst of Morgan Creek Digital Assets who said that “not only will these short-term events be good for the market – they’ll provide a buying opportunity.”
The short-term picture for Bitcoin deteriorated on Monday when the price plummeted to an intra-day low of $45,672, a long cry from the weekend’s hopeful surge over $50,000.
With the year almost through and all-time highs still over a third of the way away, traders are likely to rethink their expectations and shift the $100,000 BTC aim back to 2022.
Performance of the bitcoin market on a daily basis. Coin360 is the source of this information.
Day traders, 4-hour chart watchers, and over-leveraged longs are probably freaking out (unless they went short from $50,000 over the weekend or at this morning’s dip), but let’s look at the bigger picture.
Daily chart of BTC/USDT. TradingView is the source of this information.
On the daily period, we can see the price trying to break away from the pattern of daily lower highs, and traders are hesitant to purchase into the most recent dips, with the exception of the Dec. 4 drop below $42,000.
Following moving averages has always been an easy approach to swing trade Bitcoin, and the 20-day MA (blue) is trading below the 50-day MA (orange). Some traders simply purchase when an asset achieves a few daily closes above the 20-MA and sell when the price goes below it, believing that this indicates a deteriorating short-term trend.
Before entering fresh long positions, momentum traders can wait for BTC to close above the moving average of $53,000 on a daily basis. Waiting for convergence between the 20- and 50-MA as a clearer indicator of a trend reversal would be a better option for more risk-averse traders. A simple examination of the previous year’s price activity reveals that the method is very successful.
Why do some traders believe there will be more downside?
After achieving new all-time highs, Bitcoin price tends to form double tops, M-tops, and head and shoulders patterns, according to more experienced traders. Analysts have recently pointed to what they believe to be a double top, which is a definite trend reversal pattern, on crypto Twitter.
Daily chart of BTC/USDT. TradingView is the source of this information.
When we look at the daily time period, we can see the beginnings of what seems to be a head and shoulders pattern. The present declines and subsequent consolidation may finally complete the right shoulder, with a neckline around $41,500 and a price objective near a figure that will not be stated here.
Traders will also observe that the neckline of the head and shoulders pattern coincides with a large gap on the Volume Profile Visible Range (VPVR) indicator, indicating heightened buying activity right around the $40,000 mark.
It’s too early to make a big deal about the presence of an H&S pattern right now, particularly because price action analysis cannot be established by a single indicator, but it’s still worth mentioning.
S/R update for $BTC based on Volume Profile: Recently, $47k has been a solid support, but if it is broken, our next strong support is at $40k. If we can break over the $50.6k barrier, the next one is all the way at $56k. Let’s see how each scenario plays out! pic.twitter.com/hcmvmUbVln
December 11, 2021 — whalemap (@whale map)
The $40,000 mark is also a key spot to observe, according to data from Whalemap, an on-chain analytical site. Whalemap co-founder Andy Bohutsky told Cointelegraph in an interview,
“Basically, if we start closing daily candles below the above-mentioned support, we’ll most likely fall lower.” The one nearest to us costs roughly $40,000.”
While the present price behavior of Bitcoin does not encourage confidence in traders who purchased higher or anticipated the price to trade in the $74,000 to $80,000 region in December, analyst Mohit Sorout recently pointed out that periods of negative funding have proved to be excellent buying opportunities.
This asset$btc image has no drawback. twitter.com/Vr7mPFOvxU
December 11, 2021 — Mohit Sorout (@singhsoro)
Both the moving average convergence divergence (MACD) and the Relative Strength Index (RSI) are oversold on the daily timeframe, indicating accumulation stages and attractive chances to dollar cost average into new long positions.
The author’s thoughts and opinions are completely his or her own and do not necessarily represent those of Cointelegraph.com. Every investing and trading choice has risk, so do your homework before making a decision.
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