Table of Contents
Introduction
Merry Christmas to everyone in the crypto community! Unfortunately, Christmas Eve brought an unexpected dip in Bitcoin’s price, causing concerns among many traders. In this Bitcoin price prediction article, we’ll delve into the reasons behind this dip, analyze market indicators, and discuss why the outlook remains bullish despite the recent setback.
Understanding the Dip
The recent downward push in Bitcoin’s price can be attributed to several factors. Our analysis involves using the CVD indicator, which revealed significant absorption at a specific level. Despite buying pressure, Bitcoin formed a lower high, indicating bearish divergence. This, coupled with a bearish absorption pattern, led to the sudden downward movement.
Market Sentiment and Liquidations
Trader sentiment played a crucial role in this dip. Many retail traders expected an immediate breakout above a triangle formation, but the market had different plans. A weekend fakeout, combined with a push down to the daily support level and the golden Fibonacci ratio, triggered liquidations of approximately 17.2 million long positions. This influx of selling pressure led to a significant red candle.
Bullish Signs Amidst the Dip
Despite the dip, there are positive signs for Bitcoin. The 2-hour and 4-hour timeframes show a rebound, with the previous area of support turning into resistance and subsequently reverting to support again. This suggests resilience in the market and potential for an upward movement.
Technical Indicators and Potential Triangle Formation
Examining the daily timeframe, if Bitcoin doesn’t immediately resume its upward trajectory, there’s a possibility of a symmetrical triangle formation. Considering Elliott Wave theory, this pattern aligns with expectations for the fourth Elliott Wave. Additionally, the stochastic oscillator indicates oversold conditions, historically followed by upward movements, reinforcing the bullish outlook.
Short-Term Resistance and Long-Term Targets
While a weekly pivot point at $44,842 may act as a resistance level, it’s not considered a significant hurdle. A more substantial resistance is expected at the monthly level of $45,500. A recent weekly timeframe support at $41,382 adds further strength to the bullish case.
Trading Strategy
Considering the uptrend, shorting Bitcoin at the weekly pivot may be risky. Instead, attention is drawn to potential long opportunities, especially if Bitcoin retraces to the value area low, daily support, golden Fibonacci ratio, and liquidity level below the previous low. A rejection at the point of control could present an attractive entry point for a long position.
Conclusion
Despite the recent dip, Bitcoin appears poised for a potential bullish continuation. Technical indicators, historical data, and market sentiment suggest that higher targets, possibly around $45,500, could be achievable.
Disclaimer: Traders are advised to remain vigilant, considering potential buying opportunities during retracements, and to stay informed about market developments. Wishing you all a prosperous and crypto-filled year ahead!
