Market outlook is provided by trader Илья Мещеряков.
The start of the week is shaping up negatively for the cryptocurrency market, as a new type of coronavirus spreads in the United Kingdom and investors are preparing for further restrictive measures that will depress demand for risk assets, including cryptocurrencies.
At levels above $24,000, Bitcoin began to fall rapidly, and at the time of writing the overview it was trading at around $23,000. The positive news backdrop from last week was replaced by reports of the EXMO exchange hack and Binance going into maintenance.
A similar pattern has been observed before — reaching a new all-time high is followed by a substantial price drop, accelerated by liquidations of many buyers’ positions. Although the $25,000 level was not reached, major players achieved their main objective — driving out initial short positions by moving above $24,000.
A similar situation occurred about a month ago — on November 25, as the price moved in an uptrend and formed a new high, it began moving downward. The price managed to break the lower boundary of the channel and showed three waves of a downward movement.
In analogy, one may expect that Bitcoin’s price is playing out the scenario shown in the chart below:
- A small rise a little above $23,000;
- A decline to $20,500–$21,500;
- Continuation of the global downtrend.
Comparison of decline scenarios after price highs formed in November and December of the current year, as well as the trajectory of the expected further scenario (marked in red). The hourly BTC/USDT chart on Binance from TradingView.
Local support and resistance levels on Bitcoin’s chart. Fifteen-minute BTC/USDT chart from TradingView.