BitcoinShort
BTCUSD: Correction or change of trend?
By Ion Jauregui - ActivTrades Analyst
The cryptocurrency market experienced a turbulent weekend with a significant drop in the price of Bitcoin (BTC/USD) initiated on Thursday, January 30. The world's leading cryptocurrency retreated sharply, losing -14.29% in four trading days, with a particularly aggressive plunge on Sunday, when it lost -10.05% in a single day. This move generated uncertainty among long-term investors and left open the question of whether this is a simple correction or the beginning of a trend change.
Factors behind the drop
Several factors may have contributed to this correction in the BTC price:
1. profit-taking: after a strong bull rally in recent weeks, many institutional and retail investors decided to lock in profits, leading to selling pressure.
2. Market liquidity: Weekend moves are often amplified by lower liquidity on exchanges, which can exacerbate declines when there is an increase in BTC supply.
3. Macroeconomic data and Fed expectations: uncertainty about future interest rate decisions by the U.S. Federal Reserve has affected risk assets, including cryptocurrencies.
4. Movements in portfolios of large holders (“whales”): On-chain data shows that some large portfolios transferred significant volumes of BTC to exchanges, a signal that often precedes massive sales.
Technical Outlook: What to expect?
From a technical point of view, the fall led BTC/USD to test key support levels. Currently the price is trading at $93490, if the price manages to recover above $97000 during this week, we could see a technical rebound in the short term. However, if the selling pressure persists and support gives way, the next bearish target is at $90,800.
Technical indicators reinforce the uncertainty:
- RSI (Relative Strength Index): Over the weekend, BTC entered an oversold zone, although it has shown a slight recovery to 43.40%, suggesting a possible rebound in the coming sessions.
- 50/100-day moving average: On Saturday, the price pierced the 50-day moving average to the downside, adding the 100-day moving average as a reinforcement of that trend, which casts doubt on the continuation of the uptrend of the past few weeks. Without a quick recovery, we could be looking at a deeper correction.
- Control Point (POC): The current control point in the long term is located around $103,000, this is the bullish possibility we are talking about as a continuation of this trend.
Conclusion
Despite the fall, Bitcoin remains within a long-term bullish structure. However, the coming sessions will be decisive in defining whether the recent correction is just a breather within the rally or the beginning of a more prolonged trend reversal. The market reaction in the coming days and the evolution of macroeconomic factors will set the direction of BTC/USD in the short and medium term.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
The cryptocurrency market experienced a turbulent weekend with a significant drop in the price of Bitcoin (BTC/USD) initiated on Thursday, January 30. The world's leading cryptocurrency retreated sharply, losing -14.29% in four trading days, with a particularly aggressive plunge on Sunday, when it lost -10.05% in a single day. This move generated uncertainty among long-term investors and left open the question of whether this is a simple correction or the beginning of a trend change.
Factors behind the drop
Several factors may have contributed to this correction in the BTC price:
1. profit-taking: after a strong bull rally in recent weeks, many institutional and retail investors decided to lock in profits, leading to selling pressure.
2. Market liquidity: Weekend moves are often amplified by lower liquidity on exchanges, which can exacerbate declines when there is an increase in BTC supply.
3. Macroeconomic data and Fed expectations: uncertainty about future interest rate decisions by the U.S. Federal Reserve has affected risk assets, including cryptocurrencies.
4. Movements in portfolios of large holders (“whales”): On-chain data shows that some large portfolios transferred significant volumes of BTC to exchanges, a signal that often precedes massive sales.
Technical Outlook: What to expect?
From a technical point of view, the fall led BTC/USD to test key support levels. Currently the price is trading at $93490, if the price manages to recover above $97000 during this week, we could see a technical rebound in the short term. However, if the selling pressure persists and support gives way, the next bearish target is at $90,800.
Technical indicators reinforce the uncertainty:
- RSI (Relative Strength Index): Over the weekend, BTC entered an oversold zone, although it has shown a slight recovery to 43.40%, suggesting a possible rebound in the coming sessions.
- 50/100-day moving average: On Saturday, the price pierced the 50-day moving average to the downside, adding the 100-day moving average as a reinforcement of that trend, which casts doubt on the continuation of the uptrend of the past few weeks. Without a quick recovery, we could be looking at a deeper correction.
- Control Point (POC): The current control point in the long term is located around $103,000, this is the bullish possibility we are talking about as a continuation of this trend.
Conclusion
Despite the fall, Bitcoin remains within a long-term bullish structure. However, the coming sessions will be decisive in defining whether the recent correction is just a breather within the rally or the beginning of a more prolonged trend reversal. The market reaction in the coming days and the evolution of macroeconomic factors will set the direction of BTC/USD in the short and medium term.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.