BTC/USD: Pullback or Beginning of a Downtrend?

DailyForex.com Team

In the long term, we continue to see a totally bullish Bitcoin.

Volatility in Bitcoin remains extreme, which is what makes this asset class so striking. From its highs around $65,000, Bitcoin had a drop of more than 50%, causing the price to fall below $30,000. However, the question remains: has this only been a setback within the current trend? Or are we facing a new downtrend?

Since the beginning of Bitcoin's rise in March 2020, the asset has appreciated by more than 1400%, so we should not balk at corrections as large as these.

In the long term, we continue to see a totally bullish Bitcoin. It is true that it has had a very large correction, but despite this, Bitcoin managed to hold the $30,000 level. Since then, it has managed to recover more than 20% In addition, if we look at that same level using past data, we see how in January 2021 it was validated as a good level of support.

For now, the price is in a range between $42,000 and $30,000, and right at the top of that range is the 200-day moving average on the daily chart. Thus, Bitcoin would need to break through that confluence zone to continue its uptrend with a first target at $58,000.

Otherwise, if this scenario does not occur and we see weakness at the top of the range, we could see Bitcoin again at $30,000, where it would also be a good level to attack and join the overall uptrend.

BTC/USD Chart

But is there an opportunity to enter the market in the short term? For now, the price is in a range, and the smart thing to do would be to attack it at the extremes of the range. However, if the price shows rejection or indecision at $42,000, you could enter with a short trade with a target at $37,000, which coincides with 50% of the current range and the last higher low of the current uptrend.

BTC/USD Chart

DailyForex.com Team
The DailyForex.com team is comprised of analysts and researchers from around the world who watch the market throughout the day to provide you with unique perspectives and helpful analysis that can help improve your Forex trading.

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