Where is Bitcoin’s bottom? | Forexlive


    The
    cryptocurrency market lost 2% of its capitalisation in the past day to $2.0trn.
    Buyers stepped up in the market between 8-11 January, soon after a dip to this
    round level. But as we can see, the bulls’ strength was not prolonged enough.

    The
    Crypto Fear and Greed Index added 2 points to 24. The 18th of November was the
    last time we saw levels above 50. Since then, the cryptocurrency market has
    been steadily in a downtrend, with the overall crypto market capitalisation
    down 30%.

    Bitcoin
    is losing 2% overnight, retreating to the $42K mark, returning to an area of
    local lows before last week’s rebound. Wariness prevails in traditional
    financial markets on Tuesday morning, so a fall under $42K could quickly turn
    into a test of the $40K level.

    The
    bitcoin chart is increasingly clearly showing a downward reversal with a
    continuation within the three-month down channel. The RSI index on the daily
    charts remains in neutral territory, meaning there is still room for a decline.
    The 50-day moving average is deeper under the 200-day moving average,
    indicating that the pair is in a bearish trend.

    Ether
    pulled back to $3180 from the region of $3500, and it is sinking under the
    bears’ pressure.

    The
    methodical sell-offs are exhausting market participants, where the feedback
    loop is solid: price increases spur purchases, pushing prices up even more.
    Downturns or a prolonged period of sideways trading causes disappointment and
    waning interest.

    After all, many people come to cryptocurrencies looking for a
    quick buck. They are willing to take high risks, but the lack of momentum
    dampens the excitement. After rapid growth in 2020 and 2021, we should not be
    surprised to see the market cool down.

    The
    long term weekly candlestick chart of Bitcoin shows that over the past seven
    years, support turns the market around, even during a depression, it passes
    through the 200-week moving average. This line is now near 19k, and by the end
    of the year, it will be slightly above 20k.

    A
    bear market development for cryptocurrencies could push Bitcoin back to 20
    before the end of 2022 in a pessimistic scenario. These levels could be the
    best prices to buy, although experience suggests it could take another year of
    sluggish growth before seeing a new powerful uptrend and FOMO.

    This article was written by FxPro’s Senior Market Analyst Alex
    Kuptsikevich.



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