By Sabina Muradova
On Jan 22, 2021
After the Bitcoin (BTC) price hit as high as $ 42,000 on January 8, it shocked the market with its correction on January 10. The largest cryptocurrency, which made an upward move on January 14, fell into a correction again as of January 21.
BTC, which was traded at nearly $31,534 during the publication, has declined by about 9.16% in the last 24 hours.
Especially after the institutions showed interest in popular cryptocurrency, Bitcoin prices significantly increased. Analysts have repeatedly indicated that although it may seem scary, the correction is normal due to such growth. Bitcoin, which struggled between $ 35,000 and $ 36,000 in the first correction, suddenly lost 10% yesterday. Bloomberg analyst Mike McGlone told CoinDesk that Bitcoin “probing for support and resistance within a mostly $ 30,000 to $ 40,000 range for a while embarking on the next leg of the stair-step rally.”
According to common views, one of the major factors that caused the leading cryptocurrency’s drop was Guggenheim’s CIO word about Bitcoin. In a recent interview with CNBC, Guggenheim Partners Chief Investment Officer Scott Minerd said he expects a significant drop in the leading cryptocurrency. In the last episode of the program called “Closing Bell,” Minerd claimed that the world’s largest cryptocurrency by market capitalization would probably retrace all the way back to $20,000.
As of Friday, January 22, the BTC price has dropped more than 9% in the last 24 hours. Even though it’s down 15.11 percent weekly, overall, the BTC price rose 27.61% last month.
Analyzing the latest situation of the cryptocurrency market, analyst Michael van de Poppe shared his views on the Bitcoin price correction.
The daily chart for Bitcoin marks a tremendous uptrend in recent months. However, this rapid rise reveals some flaws. The price saw a correction of about 30% as very little support was tested during the rapid rise.
What is most noticeable on the chart are the low peaks that have continued since the $ 42,000 high. The downward movement finally came at the end of the upward leaps weakening day by day, with increasingly falling peaks in the area indicated by the triangle.
Analyst Poppe says that if the $ 30,000 level is not supported, the likelihood of a correction towards $ 24,000 will increase. This means almost 40% return from the last high.
According to another analyst Aayush Jindal, the first downside support is near the $ 31,000 level. The first major support is near the $ 30,000, $ 28,800 and $ 28,500 levels. A close below the $ 28,000 support zone could open the doors for a drop towards the $ 25,000 support zone in the coming hours, according to the analyst.
The next key resistance is near the $ 32,800 level. There is a key bearish trend line showing resistance near $ 32,700 on the hourly chart of the BTC/USD pair. To move into a positive zone, the price must clear $ 32,800 and $ 33,000. If Bitcoin fails above $ 32,000 and $ 32,800, there could be another downside risk.
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Disclaimer: All information provided in the content is for informational purposes only and should not perceive as investment, financial, or trading advice. Any investment decision you make should be a personal choice based on financial knowledge, experience, and market research.
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