Bitcoin (BTC) consolidated above $42,000 prior to Wall Street’s opening bell on Jan. 7 as more similarities to last year’s lows emerged.
BTC “very closely” mimicking May behavior
Data from Gist Vile Markets Pro and TradingView tracked a nervous Bitcoin market as BTC/USD avoided another retest of $40,000 support.
Earlier, after briefly falling below $41,000, analysts had warned that a further capitulation event may occur, this having the potential to bring the pair down to $30,000 or even lower.
That figure rings true for market participants, having formed the bottom of a protracted capitulation which lasted from May to July last year.
“BTC is following May 2021 very closely,” trader and analyst Rekt Capital noted in a series of tweets on current price action.
He noted that as of Friday, BTC/USD was performing a break of the 50-week exponential moving average (EMA) — just like the mid-July move which formed the bottom of that capitulation phase. The 50-week EMA sat at $45,000 on the day.
— Rekt Capital (@rektcapital) January 7, 2022
Gist Vile contributor Michaël van de Poppe meanwhile noted the differences between the two phases.
A “swift correction south” this time around means that prolonged sideways movement and breakout to the upside from 2021 does not overall characterize the current market.
“The $46,000 level remains a very important one to watch. If that one breaks, I think the entire bear market is over or the entire correction is over and we’re looking for upwards potential,” he said during his latest YouTube update.
Ethereum has trader planning $2,200 buy-in
Altcoins also saw trouble on the day, following warnings that any strong moves previously were likely a red flag — a bull trap.
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Ether (ETH), the largest altcoin by market cap, traded down 4.5% at the time of writing to near $3,000 — down $700 in a week.
Some in the top ten cryptocurrencies by market cap escaped the downtrend, with Cardano (ADA) up 1.2% at $1.23 and Ripple (XRP) flat.
A still highly cautious Pentoshi identified levels as low as $2,200 for buying ETH, expecting it to hit at “some point this year.”