The price of Bitcoin continues falling and is located around $ 42,831. Altcoins atre following the same trajectory due to the positive correlation with BTC. Some have lost more than 20%.
Bitcoin dropped by more than 11% of its value, taking it to a new monthly low near the psychological level of 40,000. Since December 3, for more than a month the main cryptocurrency has stagnated below $ 51,800. Many analysts believe that there will be a recovery in the short term, but this will happen after hitting a lower bottom.
The price of Bitcoin does not give any sign of recovery in the short term. On the contrary, strong volatility is expected in the market as market sentiment on Bitcoin falls to its lowest level in almost seven months.
The latest FOMC minutes showed that the policymakers are willing to raise the interest rate to stop inflation as soon as possible. In the coming months, we expect the dollar to strengthen and in turn this could play a role against Bitcoin. So, we could see Bitcoin trading around the level of $ 30,000 in the first and second quarters of 2022.
According to the weekly chart, it can be seen that Bitcoin is approaching the psychological level of $ 40,000. This zone has previously acted as strong resistance and now it has become strong support. You can see in the chart the circles that we have drawn which give us a signal to go long as the price remains above this zone. hence, we could expect a recovery of Bitcoin towards the 21 SMA located at 52,277.
On the contrary, in case of a sharp break out of this support zone, we could expect a first fall towards 3/8 of Murray located at 37,500 if the bearish force accelerates the next key support located at 25,000. This same level around 24,670 is the 200 EMA which gives BTC a bullish outlook in the long term.
Our trading plan for the next few hours is to wait for a technical bounce around the support of 40,000 to buy with targets towards 47,200 and up to 52,278. A weekly close below the psychological level of 40,000 could be a bearish sign and then we could wait for confirmation below 39,500 and sell with targets towards 37,500 and up to the psychological level of $ 30,000.
Support and Resistance Levels for January 06 - 10, 2022
Resistance (3) 48,173
Resistance (2) 44,594
Resistance (1) 43,750
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Support (1) 42,208
Support (2) 40,923
Support (3) 38,538
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Scenario
Timeframe Daily
Recommendation: buy above
Entry Point 40,000
Take Profit 47,200, 52,278 (21 SMA)
Stop Loss 38.900
Murray Levels 50,000 (4/8), 62,500 (5/8)
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Alternative scenario
Recommendation: Sell if pullback
Entry Point 52,278
Take Profit 45,000, 37,500 (3/8)
Stop Loss 53,200
Murray Levels 37,500 (3/8) 25,000 (2/8)
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