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Trader Peter Brandt warned investors that there is a dangerous pattern on the chart of the first cryptocurrency. Can the market go into a deeper correction and to what level, in this case, will bitcoin fall in price?
Last week, trader Peter Brandt warned the crypto community that a dangerous “double top” pattern is forming on the bitcoin chart, which indicates a change in trend and a possible transition of the asset into a “bear” phase. Brandt also noted that the pattern will not work until it completes its formation.
Photo: Trading View
Experts from RBC-Crypto explained how dangerous the situation on the market is and whether the industry could plunge into an even deeper correction.
There is danger
The current market situation really resembles the “double top” technical pattern, explained Nikita Zuborev, senior analyst at Bestchange.ru. According to him, this does not mean that the pattern will ultimately be fully formed. Despite the negative factors, there are also positive aspects, the analyst is sure.
“First of all, the share of bitcoin in the market continues to recover, which indicates the end of the stage of redistribution of capital from bitcoin to low-liquid assets,” Zuborev said.
The expert also drew attention to the RSI indicator, which is in the lower zone, which indicates a fairly high level of bitcoin oversold. Despite the high risks of continued local decline, in the medium term, Bitcoin is able to powerfully win back its decline, Zuborev added.
“The situation today is extremely ambiguous, but mid-term forecasts until mid-2022 are still positive. To abandon the majority of positive scenarios, bitcoin needs to lose at least half of its capitalization and reliably gain a foothold at levels below $ 28-30 thousand. Until this happens, the hope for $ 100 thousand continues to be relevant, “the analyst summed up.
If the pattern is confirmed
If the “double top” pattern is confirmed, the market will face a long period of depressed sentiment, says Nikita Soshnikov, director of the Alfacash cryptocurrency exchange service.
“There is no talk of any bitcoin for $ 5 thousand or even for $ 15 thousand. You can simply forget about such prices for cryptocurrency. But below $ 40 thousand, bitcoin may well fall and stay at this level for several weeks. I even admit a drop in the rate to $ 35 thousand, but below this mark, a departure is unlikely, ”the expert predicted.
According to Soshnikov, market participants begin to actively use technical analysis only in the absence of fundamental factors. Right now, a situation has developed on the market when no bright events are happening and investors are waiting for a signal for further action, Soshnikov explained.
Until the end of the year, the market will gradually decline in order to close the long “shadow” from the candle, which formed on December 4 after the decline in bitcoin to $ 42 thousand, I am sure Cryptorg CEO Andrey Podolyan. According to him, the current situation resembles the events of May this year, when Bitcoin took several months of accumulation to return to growth.
“There is no need to rush into purchases, you need to wait for the accumulation of volumes by large players. $ 39-41 thousand are the levels at which major players will maximize their positions and a new wave of growth will begin, ”Podolyan predicted.
Fed action
In addition to technical factors, the cryptocurrency market is negatively affected by the possible acceleration of the curtailment of the program of economic incentives in the United States, noted the director of the cryptocurrency exchange service Alfacash. In his opinion, the same factor exerts pressure on the stock market.
After a possible fall in the stock and crypto market, bitcoin may become one of those assets where investors will start to transfer their savings in a hurry in order to protect them from depreciation, Soshnikov said.
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