Even though it currently exceeds $90,000, Bitcoin is showing increasing signs of a bearish trend, making traders wary of an imminent price drop.
As an analyst, I’m observing a shift in Bitcoin’s (BTC) market trend, which seems to be leaning bearish, despite it holding above the $90,000 mark. This is evidenced by expanding lower Bollinger Bands, suggesting increased volatility on the downside. Moreover, the Greed & Fear Index is approaching 10, a historically significant level that often signifies potential trading opportunities in the opposite direction, typically representing fear among investors. Lastly, there’s an increasing likelihood of a price drop based on these indicators.
In my latest analysis, penned down on a Friday, I noted that the 30-day rolling return is approaching -10%, a threshold that has often halted or even reversed downward trends since the end of 2022. This could potentially indicate an opportune moment for a trend reversal, provided the crucial support levels remain intact.
Currently, Bitcoin’s value remains higher than its 21-week moving average, indicating that it’s still within the technical parameters of an uptrend or bull market. However, Matrixport points out that trading volumes have decreased and the creation of stablecoins has remained relatively low.
There’s a clear lack of enthusiasm or risk-taking in speculative activities. This is shown by the low levels of funding and contributes to a generally cautious atmosphere in the market.
Matrixport
Traders are swiftly securing their earnings as well. Typically, when Bitcoin experiences a rise of more than 40% in just a month’s time, it tends to reach its peak or go through a period of stabilization, according to the analysts. They further point out that this pattern aligns with December’s upward trend.
Currently, the overall outlook for Bitcoin is bearish based on our trend model. Yet, Matrixport points out an essential turning point – if Bitcoin surpasses $103,000, it may shift towards bullish territory. It’s worth noting that the longer Bitcoin maintains its current consolidation, the lower the required price level for a bullish signal, potentially leading to a change in trend direction.
The report indicates that Bitcoin’s current level of $90,000 seems stable thanks to recent investments in Bitcoin from altcoins. However, analysts have noted a decrease in this signal line, which could imply a bearish trend. Yet, they emphasize that Bitcoin’s characteristic volatility and potential for wealth creation continue to attract strategic investors, even during market downturns. This is their final conclusion.
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2025-01-17 12:55