Bitcoin Tumbles, More Downside Likely
JFD Team | Jan 10, 2022 08:03AM ET
Bitcoin has been trading in a sliding mode since Dec. 27, when it hit resistance at the $52,115 level. That said, in our view, the important technical slide was the break below $45,040 on Jan. 5. This confirmed a forthcoming lower low and the exit of the consolidation range the crypto had been trading within since Dec. 5.
Then the crypto was paused near the $40,740 level, marked by the low of Sept. 29, but bearing in mind that it is trading below the last upside support line taken from the low of Jul. 20, as well as below the downside line taken from the high of Nov. 11, we would see decent chances for further declines.
However, to get more confident on that front, we would like to see an apparent dip below the $39,400 hurdle, marked by the low of Sept. 21. This could encourage the bears to push towards the low of Jul. 25, at $34,440, and if they are not willing to stop there, a break lower could see scope for extensions towards the $29,190 area, which acted as a temporary floor between May 19 and Jul. 20.
Shifting attention to our daily oscillators, we see that the RSI fell below 30 and continued to point down, while the MACD lies below both its zero and trigger lines. Both indicators detect strong downside speed and support the notion for further declines in this cryptocurrency, at least in the near term.
To abandon the bearish case and start examining whether the bulls may have gained the upper hand, we would like to see a clear break above $53,350. The price would still be below the upside line taken from the low of Jul. 20, but the recovery would have also confirmed a forthcoming higher high on the daily chart.
We would then expect advances towards the $59,340 territory, which resisted on Nov. 21 and Dec. 1. Another break could extend towards the $62,615 barrier, marked by the inside swing low of Nov. 10.
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