- After Bitcoin briefly broke through the USD 9,000 mark on January 18, 2020, a correction followed in recent days.
- The important support zone along the USD 8,500 mark was not able to hold, so experts urge caution.
Since January 1, 2020, Bitcoin has risen from USD 6,971 to over USD 9,180, before falling to USD 8,271.19 today. The bullish signs of a few days ago are turning, so that experts in the industry are warning caution.
BTC/USD 4 hour chart
Source: Tradingview.com
The Bitcoin price on the 4-hour chart is currently dominated by the bears, who managed to breach support along the USD 8,450 mark and the exponential 100-period moving average.
Sales volume has increased significantly and the RSI shows a clear transition into the bear’s control zone. BTC is now close to a critical level and the bears could push the price further to $8,000.
The EMA of the 200-period close to USD 8,100 should serve as a price base. There could be a slight recovery of the Bitcoin price at this level. Furthermore, the volume profile shows high buying pressure in this area.
The short-term scenario seems to lead to a further correction up to the USD 8,000 mark. However, the bulls could push the price up again in this area. However, if support does not hold along the $8,000 level, the price could continue to fall to $7,600.
Industry experts disagree
Experienced Bitcoin trader Josh Rager also describes that the critical range between $8,000 and $8,165 is considered a contested zone since May 2019. If Bitcoin remains in this area for too long, another price drop could follow.
$8000 to $8165 has been an important area since May '19
Expect a bounce here, even if short term
If price breaks the support w/ ease will likely continue down
Will trade the range, happy to hit the short button if we break market structure back into old range pic.twitter.com/KaAEczSI7A
— Josh Rager ? (@Josh_Rager) January 23, 2020
The prominent analyst Alex Gedevani sees Bitcoin entering a buy zone, where investors are now trying to buy Bitcoin and hold it for the long term. In his opinion, this development applies to hundreds of thousands of investors who follow the macroeconomic trend. He writes on Twitter:
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Steady accumulation despite the media saying crypto is dead
Another indicator far away from technical analysis is the development of search volume on Google. Analyst Cryptokea recently noted that the search term “buy Bitcoin” has reached a seven-month high, the highest since June 2019. Although the metric only reached a 10 out of 100, the 100 is from the former all-time high in December 2017 and January 2018 respectively.
At any other point in time, Bitcoin’s price has risen if the search volume for this keyword reached 10. Most recently, according to Cryptokea, Bitcoin reached this search volume at the following points in time:
Nov ’13 (bull top),
May ’17 (price on parabolic run-up),
Jun ’19 (medium-term top)
>Feb ’20 (price on parabolic run-up?)
Source: https://twitter.com/CryptoKea/status/1219336771080785920/photo/1
The experienced trader “Dave the Wave” also describes that Bitcoin is moving back into the “buy zone”. Possibly a reverse head and shoulder pattern will follow, so that a breakout in the second half of the year could follow. He expects a six-month accumulation phase to follow first. It remains to be seen in which direction BTC will actually move.
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