BTC price retests the recent lows at $46,000 as institutions appear to be “selling for tax reasons” while $52,000 remains a major hurdle in the path higher.
2021 has been a breakout year for the cryptocurrency market as a whole despite the year-end struggles that have kept the price of Bitcoin (BTC) pinned below $48,000, much to the chagrin of the cadre of folks who had been calling for a $100,000 BTC moonshot.
Data from Cointelegraph Markets Pro and TradingView shows that the past 24 hours have been a rollercoaster ride for the top cryptocurrency after a brief dip below $46,000 in the early trading hours on Dec. 30 was quickly bought up to push the BTC price back above $47,500 by midday.
Here’s a look at what several analysts in the market are saying about the year-end price action for Bitcoin and what to expect in 2022 as the mass adoption of blockchain technology and cryptocurrencies continues to unfold.
Major resistance flips to support
Analysis of Bitcoin price action on the monthly chart was discussed by market analyst and pseudonymous Twitter user Rekt Capital, who posted the following chart highlighting how BTC has flipped a major resistance zone into support:
According to Rekt Capital, “BTC has turned the February, August and September resistance into new support this month” and is looking for a monthly candle close above the green zone shown in the chart above to confirm this as a new support level.
Regarding levels to watch in the days ahead, Rekt Capital is keeping an eye on the $48,500 price level as a gauge for the overall strength of BTC. The analyst said:
“If BTC is able to reclaim ~$48500 as support by the end of the week then BTC could once again revisit ~$52000 resistance.”
$52,000 is the biggest short-term hurdle for BTC
Insights into the year-end weakness of Bitcoin's price were offered by David Lifchitz, managing partner and chief investment officer at ExoAlpha, who pointed the finger at institutional investors who appear to be “selling for tax reasons with a T+3 settlement... to settle on 12/31.”
According to Lifchitz, the volatility of the past week is, in large part, due to weak liquidity in the market. He suggested that it wouldn’t be surprising to “see BTC back up to $50,000 in the next couple of days... as well as down to $46,000.”
If bears manage to break below support at $46,000 and complete the large head and shoulder pattern forming on the BTC chart, Lifchitz suggested that “the next stop could be ultimately down to $30,000” but stated that “we’re still far from that and too obvious technical patterns tend to not complete as expected.”
As far as upside levels, Lifchitz pointed to $52,000 as “the main hurdle which BTC has already failed twice.” He further stated that,
“Should that resistance get overthrown, the next upside stops are the $60,000 region then $70,000 ATH.”
A final word of caution was offered by Lifchitz regarding the upcoming Mt. Gox distribution of 146,000 BTC over the first half of 2022, which the chief information officer sees as having “the potential to reshuffle the cards big time.”
No need to panic
Reassuring words for those traders who are worried about BTC's most recent dip below $46,000 were expressed by the crypto trader and pseudonymous Twitter user Devchart. He posted the following chart showing that Bitcoin has been trading in a clearly defined range for most of December:
“Zoom out and you will see that we are just back to the bottom of the same range we have been oscillating on since December 3rd. No need to panic until we exit this range.”
A similar outlook was offered by markets analyst and Cointelegraph contributor Michaël van de Poppe, who posted the following tweet indicating that there could be some short-term weakness in the market before ultimately heading higher.
Pretty boring markets lately. Just a process of bottoming out for #Bitcoin.— Michaël van de Poppe (@CryptoMichNL) December 30, 2021
We're retesting $46K as support, bounced, but we might need to take the liquidity beneath the lows before we're going to make some upwards runs again.
The overall cryptocurrency market cap now stands at $2.237 trillion and Bitcoin’s dominance rate is 40.4%.
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