Bitcoin Poise for Correction, Odds for Downward Price Action Rise
The dust is yet to settle as Bitcoin is poise for painful correction as odds for downward price action rise following profit-taking in the cryptocurrencies space after the initial rally.
The oldest cryptoasset price has lost several key support areas in the past few days and could be poised for what another round of slowdown.
The recent upswing to $42,500 had renewed investors’ hopes that time had finally come for Bitcoin to regain its glory, moving above $50,000 and toward $65,000.
However, a correction came into the picture, with Bitcoin sliding under $40,000, now struggling at $38,000. The down leg was later stretched under the 50 Simple Moving Average (SMA) on the four-hour chart.
At the time of writing, bulls seem to be struggling to keep the price above $38,000. However, a four-hour close below this crucial level will likely trigger massive sell orders as losses progress toward $35,000.
The downtrend looks robust from a short-term technical perspective, mainly when the Moving Average Convergence Divergence (MACD) indicator is observed.
This technical indicator follows the trend of an asset and calculates its momentum.
With the 12-day EMA crossing under the 26-day EMA, the odds for a downward price action increased.
Meanwhile, The MACD has just crossed beneath the mean line, inferring that bears are completely in control. If the technical picture remains unchanged, Bitcoin will carry on with the correction to $35,000.
The Relative Strength Index (RSI) is still neutral despite the retreat from $42,500.
In other words, Bitcoin is not oversold yet, and sellers still have room to explore. Currently, the RSI holds at 35 while gradually sliding to the oversold area.
Perhaps, confirmed support at $38,000 would nullify the calls to $35,000. With Stability at this level, analysts expect buyers to start coming in masses while scepticism over the sustenance of the uptrend reduces.
A break above $40,000 will affirm the bulls’ grip on Bitcoin as eyes gaze at lifting to $50,000. Bitcoin started testing the top of its long-lasting range last week, peaking at $42,607.
Prior to that, the top cryptocurrency managed to score 10 days in the green, its longest bullish streak in eight years.
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However, the recovery came to a halt after the bulls failed to break out of the range. The top cryptocurrency has now retreated to $37,754, dropping more than 10 per cent from the local peak.
Bitcoin Poise for Correction, Odds for Downward Price Action Rise
