Bitcoin (BTC) moved back closer to $40,000 on Thursday as the $44,000 resistance proved too much for the bulls to overcome.
Buying another drop
Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair lost around 4% in 24 hours on Friday.
The pair had broken above $44,450 on Bitstamp before the pullback started, with local lows of $41,780.
While disappointing to those hoping the worst of the pullback had passed, analysts did not seem surprised by the move, which they said could be resolved through a retest of $40,000 support.
— Michael van de Poppe (@CryptoMichNL) January 14, 2022
Popular trader Pentoshi also appeared to get his wish, BTC “sweeping” lows below $42,000 in what he had previously identified as a excellent opportunity to enter. $46,000, he added, could be the next level.
But nevertheless, Another “death cross” chart construction was coming in the BTC/USD pair, a classic warning sign of bearish conditions.
As Cointelegraph previously reported, a death cross occurs when the falling 50-day moving average crosses below the 200-day moving average. The feature is somewhat rare, but not always has resulted in bearish behavior ever since.
Conclusion to the upside is still within the possibilities
Looking ahead, analysts at trading suite Decentrader remained bullish on medium-term price action, acknowledging that another drop into the $30,000-$40,000 range may yet occur.
The two-month downtrend from early December was ripe for disruption, they argued in a market update issued on Friday, and the upside was “likely” to cascade down.
“We think we may need to see a bigger range between $44,000 and potentially $38,000 before an eventual breakout. This range is likely to cause further pain and misery for any trader impatiently trying to get ahead of major moves before they are ready,” the update summarized.
Encouraging, Decentrader added, was that funding rates slowly turned more consistently negative as sentiment finally shifted to expect more declines – healthy conditions for a contraction to the upside.
“Given Bitcoin’s current fundamentals and the size and consistency of the downtrend over the past 2 months, we believe a move out of the range to the upside is the most likely outcome eventually.”