After falling more than 12 percent in the previous session, Bitcoin prices fell on Monday as the US dollar recovered and US benchmark returns gradually increased, as the flagship cryptocurrency’s safe-haven attractiveness deteriorated.
Spot BTC / USD fell 21.61 percent to $ 33,739 .39 per token, after reaching a record high of $ 41,986 on January 8.
The effective fall caused Bitcoin analysts to predict the next price direction. Predicting the future BTC / USD at $ 400,000, Scott Minerd said the continued rise of the pair appears unsustainable in the short term and points to its excessive expansion that could lower its price.
Meanwhile, leading Bitcoin bull Vijay Boyapati has argued for the cryptocurrency’s latest price correction, recalling that the fluctuating bull movements have historically shown negative movements of 30-40 percent each. The analyst stated that Bitcoin’s positive mood will continue as soon as a session finds support.
In the 2017 #Bitcoin bull market, corrections found demand after drops from 30-40%
In the current bull market demand seems to appear after corrections between 15-20%.
This is probably indicative of a difference in buyers: retail (2017) vs institutional (today). pic.twitter.com/OfRX28lEco
— Vijay Boyapati (@real_vijay) January 10, 2021
Boyapati’s prediction may come true as Bitcoin enters a week to witness the announcement of a new stimulus package. US President-elected Joe Biden told reporters on Friday that one of his priorities after taking his oath would be to spend trillions of dollars to boost the US economy.
Financial deficits support Bitcoin’s investment thesis. When the US Congress passed two incentive laws worth $ 3.2 trillion, the cryptocurrency rose more than 900 percent. This has reduced the attractiveness of the US dollar and prompted investors looking for security in more risky assets to take advantage of the best cryptocurrency.
Entering the field of technical indicators, Bitcoin is showing signs of short-term decline.
This is primarily due to two factors: an overextended Relative Strength Index and Increasing Expanding Wedge over the weekly time frame. Bitcoin’s latest downside move has neutralized RSI to some extent, but remains in an overbought area. This means a lower correction.
Meanwhile, the Increasing Expanding Wedge is showing signs of a bearish trend as the price tests the lower trendline support for a potential negative breakout.
The price shows the sellers’ ambition to take control, as it validates at least three tests of the upper and lower trendline, both of which differ from each other. On the other hand, buyers make the price rise again on the support line, but lose control after the asset creates a new high. It seems like Bitcoin did something similar.
The cryptocurrency now has the possibility to drop below an 80 percent Kama, depending on the overall performance of the pattern in traditional markets. If movement occurs, the BTC / USD pair will target the Channel’s lowest point as its downside target of $ 24,655.
However, the pair may retreat from the lower trendline itself, rise towards the upper trendline, and then a breakout. In a bearish move, the price could also retrace at $ 26,375 or $ 29,891.