On Dec. xiii, Bitcoin'southward short-term outlook worsened afterward the price fell to an intra-24-hour interval low at $45,672, a far weep from the weekend'due south promising rally above the $l,000 level.

With the twelvemonth nearly complete, and all-time highs nearly 33% away, traders are most probable readjusting their expectations and pushing the $100,000 BTC target a scrap further into 2022.

Daily cryptocurrency market functioning. Source: Coin360

Day traders, iv-hour nautical chart watchers and over-leveraged longs are likely freaking out (unless they went short from $50,000 over the weekend or at this morning's weakness), merely permit's zoom out a little bit to see where Bitcoin price stands.

BTC/USDT daily chart. Source: TradingView

On the daily timeframe, we can see the toll struggling to breakout away from the trend of daily lower highs and aside from the December. 4 drop to $42,000, traders appear apprehensive to purchase into the most contempo dips.

Tracking moving averages has always been a relatively simple way to swing merchandise BTC and currently, the 20-day moving average (MA) (bluish) is beneath the 50-day MA (orange). Some traders simply purchase when an asset secures a few daily closes higher up the 20-MA and sell when the price falls below information technology because this is a sign that the curt-term trend is weakening.

Following this exercise, momentum traders might look for BTC to secure a daily close to a higher place the moving average at $53,000 earlier opening new long positions. More than run a risk averse traders might consider waiting for convergence between the xx- and l-MA as a clearer sign of a trend reversal. Taking a quick look at the concluding year of toll action proves that the strategy is pretty effective.

Why some traders expect more downside

More experienced traders know that Bitcoin price has a tendency to brand double tops, Grand-tops and head and shoulders patterns after hitting new all-fourth dimension highs. Lately, analysts on crypto Twitter have pointed to what they perceive to exist a double top, which is a clear tendency reversal pattern.

BTC/USDT daily chart. Source: TradingView

Looking at the daily time frame, we can begin to run into what looks like the start of a caput and shoulders blueprint. The current dips and following consolidation could eventually complete the correct shoulder, with a neckline at $41,500, and a price target near a number then unbelievably depression that it won't be written here.

Traders will also discover that the neckline of said head and shoulders pattern aligns with a wide gap on the volume profile visible range (VPVR) indicator, which shows increased buying interest correct at the $40,000 level.

At the moment, it'south too early to make besides much fuss nearly the existence of an H&S pattern, especially since an analysis of toll activeness cannot be determined past a single indicator, but it is yet something worth noting.

Data from an on-chain assay outlet, Whalemap, too pinpoints the $40,000 level as an expanse to sentinel closely. While speaking to Cointelegraph, analysts at Whalemap said,

"Basically, if we outset closing daily candles beneath the support outlined above, we volition probably go to a lower ane. The closest below u.s.a. is effectually $40,000."

While Bitcoin'south current price action does lilliputian to inspire confidence in traders who bought college or expected price to trade in the $74,000 to $eighty,000 range in December, analyst Mohit Sorout recently pointed out that phases of negative funding have proven to be slap-up buying opportunities.

On the daily timeframe, the moving average convergence divergence (MACD) and relative force index (RSI) are also oversold, both of which take historically pointed to accumulation phases and good opportunities to dollar cost boilerplate into fresh long positions.

The views and opinions expressed here are solely those of the author and practise not necessarily reflect the views of Cointelegraph.com. Every investment and trading motion involves risk, y'all should conduct your own research when making a decision.