Bitcoin is ready to target the $ 27,000 level if support around $ 30,000 fails, analyst Alex Kruger said.
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Price needs to let volatility wear off before its next big move. Thinking 30K-40K range for the next 1-2 weeks. Then either 50K straight or after piercing 30K and bouncing back above 30K within 1-2 days. https://t.co/DZw0frBQzc
— Alex (@classicmacro) January 18, 2021
Currently, there are three significant levels on the market: $ 34,500, $ 30,500 and $ 27,000. The support of $ 34,500 protected from further falling during the last days, and each decline to it ended with a rise to values around $ 36,300. The $ 30,500 level was the final point for the sharp correction that occurred amid liquidation of $ 2 billion in futures contracts on January 11.
“Decision making is a dynamic process,” writes Kruger. – Nothing is predetermined. Most likely, if the price goes back to $ 30,000, this level will hold up next time. The strategy is to have enough resources to buy on a pullback. If the $ 30,000 level is broken, there will be no buying at all until the decline to $ 27,000 and a rise above $ 30,000. ”
A similar point of view was expressed by an analyst at Tradermayne:
“I think we can hold out here and get a decent rebound on Monday. If we can take the gray area from above, I expect a new all-time high. Let’s lose the gray area at the bottom and go under $ 30,000. Ideally, we will stay between the two levels and altcoins will continue to rise. ”
Krueger believes that altcoins will be “destroyed” by the correction if bitcoin drops to $ 27,000. As a rule, they have less liquidity and volumes, and therefore respond more actively to the swings in the mood of traders.
“If, for any reason, BTC drops to $ 27,000, expect to wipe out altcoins in a 35-50% drop within one day. In this scenario, buying altcoins is better than buying BTC. And it is definitely better than buying BTC with leverage. Pick the winners and jump in, ”he added.
By the time of publication, Bitcoin has grown by 5% over the past 24 hours to $ 37,000, but, nevertheless, remains in its previous channel. Kruger recalls that this is the first time a cryptocurrency has found itself in such a clear range since October last year.
“While I remain extremely bullish, for the first time since April I am slightly worried about the depth of the short-term decline. Nevertheless, I am confident in the growth in the later period and expect a re-emergence of positive news. Real money wants to come in and will come in, ”he adds.
On a weekly basis, Bitcoin is down 6%, which corresponds to the largest decline in one week since September 2020.
The activity of traders in the options markets and the short-term nature of deeper declines paint a bullish picture. However, Patrick Heusser, head of trading at Swiss firm Crypto Finance AG, believes it’s too early to talk about the end of the correction, while the cryptocurrency is in a narrowing triangle on the hourly chart.
A breakout in one of two directions could seize the market, Heusser argues, but a rally above the previous high of around $ 42,000 is needed to get a more reliable signal that the bullish trend will continue.
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