The recovery was short-lived. A sale on the American technology exchange Nasdaq also caused a double-digit price correction for Bitcoin. The chart image threatens to become increasingly cloudy if the price continues to weaken.
Bitcoin (BTC): a relapse with aftermath
BTC course: 49,123 USD (previous week: 58,294 USD)
Resistance / goals: US $ 51,307, US $ 53,327 / 53,005, US $ 54,077, US $ 55,817, US $ 57,901, US $ 59,778, US $ 61,771, US $ 63,189, US $ 64,896, US $ 66,299, US $ 67,416, US $ 69,000, US $ 70,856, US $ 76,472, US $ 77,678, US $ 85,563, $ 87,090, $ 89,982, $ 100,259, $ 114,961
Supports: $ 49,555, $ 48,222, $ 47,070, $ 46,504, $ 42,563, $ 40,585, $ 39,581, $ 37,389, $ 34,899, $ 30,000, $ 26,170
In the short term, it looked as if the Bitcoin price could stabilize in the USD 54,000 area and form a bottom. Statements by the head of the US Federal Reserve regarding a faster rate hike burdened the entire financial market shortly before the end of the week. The momentous formation of a new weekly low on the last Friday, December 3rd, triggered a cascade of liquidation of the leveraged futures contracts on the following Saturday morning, which corrected the Bitcoin rate by 20 percentage points within a few hours.
The key crypto currency was only able to stabilize in the area of the 38 Fibonacci retracement at USD 42,333 and temporarily rise back to the red overarching upward trend line yesterday, Tuesday. Here the price bounced off again to the south and is trending back in the area of 49,000 USD on Wednesday, December 8th. Ongoing reports about the insolvency of large real estate companies in China, as well as the hearing of several CEOs from the cryptospace in the middle of the week heighten worries about emerging problems in the financial market and increasing regulatory hurdles.
Bullish scenario (Bitcoin price)
The dynamic fall below the previous low of USD 53,327 was followed by the sell-off. The cops did not have to counter the selling pressure. As a result, there were massive liquidations of open long bets, which intensified the price correction. In total, positions valued at around USD 2.5 billion were liquidated within a few trading hours. Although there was a clear recovery in the following days, the sustainability of this movement has yet to be proven with a clear recapture of the red downward trend line. Renewed price drops in the last hours of trading could nip this attempt in the bud. Bitcoin is now trading under the EMA200 (blue) again.
In the short term, the bulls will have to do everything possible to stabilize the BTC rate above USD 46,504 at the end of the day. The MA200 runs here (green). Only when the buyer succeeds in rising back above 51,307 USD on a sustained basis does the orange zone come back into the focus of investors. If the bulls manage to heave the BTC rate towards USD 54,000 and stabilize above it, a subsequent rise to USD 55,817 should be planned. This would at least recapture the EMA20 (red). The EMA50 (orange) also runs just above USD 55,817, which should be difficult to overcome at the first attempt. If, on the other hand, there is an outbreak above this resist, a march back to USD 57,901 is conceivable. If Bitcoin does not bounce again sustainably towards the south and continues to rise, a directional decision will be made in the area of 59,778 USD for the coming weeks. As discussed in the previous week’s analysis, the USD 60,000 zone represents a massive area of resistance.
The way to the all-time high
If the bulls succeed in pulverizing this resistance level, the chart will brighten noticeably. In the next step, the buy side must try to dynamically regain the resistance at USD 61,771. If the Bitcoin price rises above this price mark, another important technical hurdle awaits between 63,189 USD and 64,896 USD. Only when the BTC rate breaks the USD 64,896 daily closing rate does the next target price be activated at USD 66,299. Here the BTC rate failed as early as November 15 and subsequently rebounded significantly to the south. Before Bitcoin does not stabilize sustainably above this price level, a resumption of the downward movement must be planned at any time.
If, on the other hand, the bulls manage to buy the BTC price above this level, the USD 67,416 and especially the all-time high of USD 69,000 will come into focus as targets. If the breakout succeeds above the previous high, the price target is 70,856 USD. In the medium term, Bitcoin could then march towards the resistance at USD 76,472 and USD 77,678. If, despite profit-taking, stabilization above USD 70,000 is achieved, a subsequent increase into the zone between USD 87,090 and USD 89,982 cannot be ruled out. The overriding price targets are unchanged at USD 100,259 (Fibonacci extension 361) and USD 114,961 in the long term (Fibonacci extension 461). However, these price levels are likely to be difficult to achieve at the moment. Currently, investors should wait for a possible bottom formation above USD 40,000 before making new entries.
Bearish scenario (Bitcoin rate)
The bears showed their claws and caused a sale on the entire crypto market. In addition to Bitcoin, all Altcoins also came under greater pressure. The current drop below $ 50,000 suggests the bears are looking to seize their chance this time around. If Bitcoin is again valued below the EMA200 (blue), which is in the range of USD 50,100, at today’s end of the day, the green support zone comes back into focus. Should the range between USD 47,070 and USD 48,222 be sustainably undercut, the bears must do everything in their power to undercut the MA200 (green) at USD 46,504 per day’s closing price. Once again, the downside momentum should pick up and retest the area around $ 42,855. If Bitcoin does not turn significantly north here, a relapse to the low from September 2021 at USD 40,585 is likely. If this support is also abandoned, the correction extends directly to the maximum bearish price target of USD 39,581.
Abandoning this price mark at the weekly closing price would have a signal effect. The long scenario would have ended and a direct sell-off to the 23rd Fibonacci retracement at USD 37,389 would be likely. While there is a residual chance of a rate reversal, a relapse into the turquoise area between USD 36,643 and USD 34,899 is more likely. Taking a break from this area is conceivable. It must be doubted whether these are sufficient to avert an expansion of the correction into the purple support zone in the area of USD 30,000. Rather, there is a risk that this zone will only have a short-term supportive effect. In order to trigger the bulls’ stop-loss orders in this area of the chart and complete its corrective movement, the Bitcoin price could drop into the light green zone between USD 26,170 and USD 27,562. Only here are the bulls likely to increasingly return to the market. If you look at the weekly and monthly charts, there is definitely room for a correction in this chart area.
Bitcoin dominance: BTC dominance back at 40 percent
Bitcoin dominance formed a new low this week and briefly fell back to 40.22 percent. BTC dominance rose to the resistance at 41.94 percent at the beginning of the week, before a new corrective move pushed Bitcoin’s market power back below 41.13 percent. Thus, Bitcoin dominance is still trapped in a five percent range. As long as the dominance does not win back the mark of 41.94 percent in the long term, there is still a retest of the annual low in the area of 39.66 percent.
BTC Dominance: Bullish Scenario
The liberation blow is still a long time coming. Even in the last seven days of trading, the dominance of the crypto key currency has tended to be bearish and has not yet been able to initiate a turnaround. As long as the price cannot break the resistance at 41.94 percent upwards, the view will be directed further south. Only when the BTC dominance can break out over this resist at the end of the day, an increase of up to 42.38 percent should be planned. The next strong resistance line is already waiting in the orange resistance zone with the EMA50 (orange). If the BTC dominance can also break this, 42.99 percent will make an initial directional decision. If the outbreak succeeds, a recovery movement is conceivable. Then there is initially an upward potential of 43.70 percent.
The first cross resistance from the Supertrend and the upper Bollinger Band is waiting here. Just above this is the MA200 (green) and at 44.25 percent, an area that could not be overcome several times recently. If the break in the chart succeeds, the BTC dominance should be able to generate a further boost and target the blue zone between 45.46 percent and 46.14 percent. With the EMA200 (blue) and the important resistance at 45.71 percent, this area is again a strong hurdle. As long as this zone cannot be recaptured in the long term, a recovery to the October high of 47.72 percent is out of the question.
BTC Dominance: Bearish Scenario
The weakness of BTC dominance continues. The formation of a new course low speaks a clear language. As long as the BTC dominance is valued below 41.13 percent, around 40.66 percent per day’s closing price, a retest of the psychologically important 40 percent mark is only a matter of time. If the Bitcoin dominance cannot stabilize here, the annual low of 39.66 percent moves into focus as the target. Persistent weakness in the coming weeks makes a trend acceleration towards support at 37.67 percent conceivable. If the BTC dominance persists without a clear countermovement, a relapse to the psychologically important 30 percent mark cannot be ruled out in the next six months. In addition to the current outperformance of Ethereum compared to Bitcoin, the sheer amount of new Altcoins every day makes a sustainable recovery of Bitcoin dominance difficult.
Disclaimer: The price estimates presented on this page do not constitute buy or sell recommendations. They are only an assessment of the analyst.
The chart images were created using TradingView created.
USD / EUR exchange rate at the time of going to press: 0.88 euros.