Just like Miter Sinterklaas, the cryptocurrency market turned red this weekend. Bitcoin price suffered a loss of at least 25 percent. Was this the last drop before a new all-time high?
It was a shock to the people who opened their wallet on Saturday morning. Heavy losses were incurred at night from Friday to Saturday. The cryptocurrency market fell violently around 5 am; About twenty percent in half an hour. Bitcoin It fell from about $52,000 to nearly $42,000 (46,000 to €37,400). The price managed to recover at this low point and rose again to $48,000 (€42,500) within a few hours.
What do we see now?
Bitcoin jumped from $42,000. This happened around the area that served as a support in September of this year. From here, bitcoin recovered slightly, only to range between $47,000 and $50,000 (€41,500 and $44,300).
As shown in the chart above, Bitcoin reached a well-known point with this drop. Before returning to $48,000, bitcoin hit the spot that served as resistance during the ‘corona crash’. Such a swing in support/resistance is usually a change in market structure, which was proven in November. Bitcoin first rose to an all-time high before this drop occurred at Sinterklaas.
Looking at the market structure on the daily chart, nothing bad is happening yet. Bitcoin reached an all-time high with a November high. Besides the drop at the end of last week, bitcoin is still in an uptrend. If this market structure continues, this means that a new high is possible. The market trend is still bullish with this.
Real fears should only emerge when the price closes below the $40K support area. This would confirm the beginning of a downtrend. In this case, the next support is 30 thousand dollars (26,600 euros). This could be quite a battleground as it’s about 40% off the current price (at the time of writing).
Don’t panic now, a happier scenario may happen as well. If the price remains above the support area, the previous all-time high (and possibly even higher) is a realistic target. This could mean that the current uptrend has not yet been broken, and new highs are just being marked.
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