Bitcoin (BTC) – Heading towards a crucial support sectionPosted on Sunday, January 23 2022 at 9:29 pm GMT+0000
Bitcoin (BTC) cracked the crucial 40,000-39,500 support base on Thursday and plummeted to a fresh 6-month low nourishing its bearish zigzag course below the key descending trendline pulled from the November peak.
Technically, the falling simple moving averages are sponsoring the dictating bearish structure, keeping additional declines on the table.
So, in the meantime, any drop below 34,000 could see an extension towards the key section of congested lows posted between May and July from 30,000 to 28,600, where any violation will trigger another aggressive sell-off initially towards the 25,000 area.
That said, a minor rebound or at least some stabilization in the forthcoming sessions cannot be ruled out, as the RSI and the stochastics are looking set to change course in the oversold area. Of note, following last week’s sharp decline, the former reached its lowest level since March, amplifying the case for a minor recovery.
Yet given the current conditions, any improvements will likely be short-lived and downside risks will remain heavy as long as the price remains below the 39,500 support turned resistance level and the adjacent trendline. A sustainable move beyond that key area will attract some new buyers to the market initially sending the price towards the January 13th high of 44,500.
To summarize, even if negative momentum could slow pace in the forthcoming sessions, the crypto king still has plenty of scopes to stretch the current downward pattern towards the 30,000-28,600 zone.