Bitcoin (BTC) returned closer to $40,000 on Thursday as $44,000 resistance proved too much for bulls to overcome.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Buying another dip
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD shedding around 4% in 24 hours Friday.
The pair had topped $44,450 on Bitstamp before the retracement kicked in, this seeing local lows of $41,780.
While disappointing for those hoping that the worst of the pullback was over, analysts appeared unsurprised by the move, which they said could resolve via a fresh test of $40,000 support.
Pretty much the path for #Bitcoin. pic.twitter.com/VY0BkTXYOM
— Michaël 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 prime opportunity for entry. $46,000, he added, could be next.
Looming large, however, was another “death cross” chart construction on BTC/USD, a classic signal warning of bearish conditions.
As Cointelegraph previously reported, a death cross occurs when the declining 50-day moving average crosses under the 200-day moving average. The feature is somewhat rare but has not always resulted in bearish behavior thereafter.
BTC/USD 1-day candle chart (Bitstamp) with 50-day, 200-day moving averages. Source: TradingView
Upside conclusion still on the cards
Looking ahead, analysts at trading suite Decentrader remained bullish on mid-term price action, acknowledging that another dip into the $30,000-$40,000 range may yet occur.
Related: Top or bottom? Traders at odds over whether Bitcoin will keep rising
The two-month downtrend from early December was ripe for disruption, they argued in a market update issued Friday, and the upside was “likely” over a cascade lower.
“It is our view that we may need to see some further ranging between $44,000 and potentially $38,000 before an eventual breakout. This ranging is likely to cause more pain and misery for any traders who try to impatiently front-run major moves before they are ready,” the update summarized.
Encouraging, Decentrader added, was funding rates slowly becoming more consistently negative as sentiment finally flipped to expecting further downside — healthy conditions for a squeeze to the upside.
“Given the current fundamentals of Bitcoin and the size and consistency of the downtrend over the past 2 months, we do believe that a move out of the range to the upside is the most probable outcome eventually.”
BTC funding rates chart. Source: Coinglass
