The latest “death cross” on Bitcoin’s daily chart is swept aside in favor of buy signals and the “final” rally towards $50,000.
Market Update
Bitcoin (BTC) pulled back near the $40,000 level on Thursday as the $44,000 resistance proved too much for the bulls to break through.
Buy one more discount
Data from Cointelegraph Markets Professional and TradingView shows that BTC/USD is down around 4% in 24 hours on Friday.
The pair hit a high of $44,450 on Bitstamp before the retracement started, which saw a local low of $41,780.
While disappointing those hoping that the worst of the pullback is over, analysts are unfazed by the move, which they say can be resolved through a fresh test of $40,000 support level.
Quite a few paths for #Bitcoin. pic.twitter.com/VY0BkTXYOM
– Michaël van de Poppe (@CryptoMichNL) January 14, 2022
Popular trader Pentoshi also appeared to get his wish, BTC “sweeping” lows below $42,000 at a level he previously identified as main opportunity For entry. $46,000, he added, could be next.
Big looming, however, is another “death cross” chart build on BTC/USD, a classic warning signal of bearish conditions.
As previously reported by Cointelegraph, a death cross occurs when the 50-day moving average drops below the 200-day moving average. The feature is a bit rare but there is not always leading to subsequent bearish behavior.
The reverse conclusion is still on the cards
Looking ahead, analysts at trading division Decentrader remain bullish on medium-term price action, acknowledging that another drop into the $30,000-$40,000 range is likely.
Related: Top or bottom? Traders Debating Whether Bitcoin Will Continue To Rise
The two-month downtrend since early December is ripe for disruption, they argued in a market update released on Friday, and the upside is “likely” from the lows. than.
“In our view, we may need to see some more swings between $44,000 and $38,000 before a final breakout. This gap can cause more pain and misery for any trader who tries to impatiently run ahead of big moves before they are ready,” the update summarizes.
What’s encouraging, Decentrader added, is that funding rates gradually turn more negative as sentiment eventually shifts to expectations of further downside – healthy conditions for prices.
“Given Bitcoin’s current fundamentals and the size and consistency of the downtrend over the past 2 months, we believe a eventual move out of the range to the upside is the most likely outcome. ”
