Analyst names potential level of bitcoin price drop

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About further possible scenarios of bitcoin price movement, RoboForex leading analyst Dmitry Gurkovsky tells.

BTC/USD quotations failed to push back from the lower boundary of the Triangle pattern and went lower. There was a breakdown of the lower boundary of the pattern with its subsequent test, and now the asset is trading near the level of $31,000. If we defer the height of the pattern from the breakdown point, the downside target might be the level of $22,000. Therefore in case the price fixes under important level of $30,000, its further decrease within the limits of model working off is not excluded.

 

On the daily chart RSI indicator has once again „caught“ the support line, which might indicate a high probability of rebound from the current levels and continuation of the uptrend. An additional signal in favor of this option would be a rebound from the lower boundary of the uptrend channel.

Despite such a significant drop in the value of the asset, Michael Sailor, at the time of the $30,000 level test, again posted a tweet where he wrote that MicroStrategy bought another 314 BTC at an average price of $31,808 for $10 million. The last time he wrote about a large purchase on December 21, 2020, when the price briefly corrected and then went back up. But that time it was about $650m. Taylor thus hints that you should not buy at the peak, but at times of large price drops.

The growing number of addresses, which contain more than 1,000 bitcoins, also points to the end of the downward correction. A new record of 2,446 addresses has been set here. There are 140 more in the last 20 days alone, which may indicate that large investors are ready for BTC growth in the near future. All in all, this all supports the theory of assets shifting from small crypto market players to wealthier bitcoin owners, who are only hoarding coins without considering selling them.

In turn, there is growing interest in digital currencies from the US government as well. Janet Yellen, who just became Treasury Secretary in the Biden administration, said she was concerned about the illegal use of cryptocurrencies. She noted that such assets provide an opportunity to circumvent the current financial system and undermine American interests. However, Saylor is confident that new rules to regulate digital currencies will ultimately be positive for bitcoin’s growth. Such an approach will accelerate the attraction of institutional money to the market.

 

On the 4-hour chart, the RSI indicator values have broken the downtrend line for the first time since the correction from the $42,000 level developed. This may be a signal to its completion and resumption of price rise. In this case, the nearest growth target will be the level of $34,500.

As an alternative variant the current price movements may be considered as the „Wedge“ model with a test of its lower boundary at the level of $28,000. Breakdown of the pattern’s upper boundary and fixation of the quotes above the level of $32500 will indicate the potential for their growth towards the level of $42 000 and above within the reversal pattern working out.