Trader outlines upcoming support levels for bitcoin price

Financial market forecasts are the private opinion of their authors. Current analysis does not constitute trading guidance. ForkLog is not responsible for the results that may arise from the use of trading recommendations from these reviews.

Trader Ilya Mescheryakov talks about the current market situation.

The beginning of the week is negative for the cryptocurrency market – amid the spread of a new type of coronavirus in the UK, investors are preparing for another restrictive measures, which will cause a drop in demand for risky assets. Cryptocurrencies are among the latter.

After hitting a new all-time high of above $24,000, bitcoin started to fall precipitously and at the time of writing is trading at $23,000. The positive news backdrop of last week was replaced by information about Exmo being hacked and Binance going into maintenance.

A similar situation could be observed before – the renewal Profit Secret of the historical high is replaced by a significant price decrease, which is accelerated by the liquidation of the positions of numerous buyers. In spite of the fact that the mark of $25,000 was not reached, the major capital managed to fulfill its main goal – to knock out the initial short positions by a hike above $24,000.

It had a similar situation about a month ago, on November 25, it went downwards in an uptrend channel, made a new high. The price managed to break the lower boundary of the channel and demonstrated three waves of downward movement.

By analogy, we can assume that bitcoin price will implement the scenario shown in the chart below:

a small rise just above $23,000;
decline towards $20,500-$21,500;
continuation of the global downtrend.

Comparison of downside scenarios after the price highs in November and December this year, as well as the trajectory of the assumed further scenario (marked in red). Hourly chart of BTC/USDT of the Binance exchange from TradingView.

On the small timeframe, a quote of $23,228 can be noted for the first short-term growth target, while $20,854 can be noted as a further downside target. The levels that stopped the current decline – $21,800 and $22,420 are important boundaries for position fixing.

Local support and resistance levels on the Bitcoin chart. TradingView’s fifteen-minute chart of BTC/USDT.

The strong reaction of the altcoin market is also worth noting – a significant decline in a number of coins suggests panic mood in the face of partial uncertainty.

This week could well be a red week for bitcoin. Both external factors and technical patterns are contributing to this. And while it is still too early to talk about opening short positions, the moment to lock in long positions (at least partially) could be quite opportune.

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