Bitcoin finally fell into the final zone of the fluctuation area after the release of the Fed minutes and the tense situation with mining in Kazakhstan. As a result, traders lost $810 million, and the market finally lost faith in cryptocurrency. The dominance of bears has intensified, thanks to which Bitcoin has reached a new local bottom at $41k. The asset failed to consolidate below this area due to the rapid buying-off of buyers.
As of 11:00 UTC, Bitcoin is trading in the $42.4k region, with trading volumes rising to $57 billion. I assumed that with a decline to the $41k–$42k area, a massive buyback would occur, and the price would break through the $45k mark in impulse movement. As a result, the situation remains bearish, and the coin remains in the local bottom range of $45k–$41k. The crypto asset managed to bounce off the local support zone at $40.9k, but in the near future, we will have a period of stabilization and consolidation in the $45k–$41k area.
Having broken through the key and final support level at $42.2k, Bitcoin completed the formation of the head and shoulders technical analysis pattern. This pattern indicates a trend change. In a specific case, the trend will change from an upward to a downward one with a downside potential in the $25k region. The continuation of the downward trend is indicated by the absence of active purchases of the coin in the current range, which is an excellent place to enter.
Technical indicators confirm the calmness in the market and the complete predominance of sellers. The MACD indicator has formed a bearish crossover and continued the downward movement, while the RSI has left the bullish zone and is moving into the oversold area. The Stochastic Oscillator also does not show upward signals.
Despite the growth in retail purchases, the market still lacks the activity of large investors. According to Bloomberg and Goldman Sachs, this may be due to the global reorientation of institutional investors in the world's stock markets. Experts said late 2021 saw the largest tech sell-off in 10 years. According to a survey from Nickel Digital Asset Management, large companies are seriously concerned about the safety and security of funds. According to data for 2021, crypto scammers have stolen a record $14 billion in cryptocurrency. Therefore, big capital is in no hurry to enter the cryptocurrency market.
On the positive side, retail investors believe in Bitcoin. On the leading cryptocurrency exchanges, the number of longs significantly exceeds the number of shorts. On the one hand, we know that the market is playing with the expectations of the players and this situation is fraught with another strait. On the other hand, this means that the market is ready for growth and believes that BTC has reached a local bottom.
I continue to hold the opinion that the cryptocurrency is moving in the May scenario. This means that the $41k mark became the first pivot point for the formation of the double bottom pattern. Unless a massive buyback and activation of large investors follows in the near future, Bitcoin will continue to consolidate, moving flat. Subsequently, I look forward to a retest of $41k and further upward movement.The Bitcoin market has suffered enough, the asset has reached a minimum point in this growth cycle and will soon resume its upward movement.
