Is a fight between $30K and $33K coming?

Threats of rising inflation and a potential Russian incursion into Ukraine have dampened global market prospects. Unfortunately, Bitcoin was at the end of a brutal sell-off, recording a nearly 20% drop in value last week. The charts show a dire condition, with some analysts calling for a return of $30,000. However, there has been some evidence to suggest that BTC can prevent the worst outcome. At the time of writing, BTC was trading at $36,907, down 6% over the last 24 hours.

Bitcoin daily chart

Source: TradingView

Unable to advance above $46K last week, Bitcoin’s relief rally came to an unpleasant end as the bears saw a return to normalcy. Bitcoin was about to form a sixth red candle in the past seven trading days, depicting the huge increase in downward pressure. Short-term defenses were available at $36,250 and the same could delay a serious reaction. A dead cat return back to $39,600 cannot be ruled out either, with the daily RSI just below the oversold region and a potential double bottom awaiting $33,000. However, the resulting head and shoulders pattern would only play in favor of the bear side.

Some regions in the graph stood out as more reliable. For example, the BTC demand zone between $30,000 and $28,660, established in June-July 2021, was ideal for a price reset. The late 2021 BTC bull run took place after a base was established within that zone.

Bitcoin losing to gold

Some cryptocurrency analysts also favor a prolonged decline. When comparing Bitcoin to gold, John Roque of 22V Research he said in a research note “We are looking for Bitcoin to bounce back to 30,000 and then break below and we continue to expect gold to make a new all-time high.”

King’s coin is often compared to gold, as both are considered a hedge against inflation. However, gold prices are rising as global tensions remain high. Prices for the yellow metal are currently trading at just under $1,900 an ounce, their highest level since June 2021.

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Investors don’t buy The Dip, but that might be a good thing

Source: Holiness

Big sales can present opportunities to ‘buy the fall’, but Dice from Santiment revealed that investors are nervous despite the discounted nature of BTC. According to Santiment, social volume mentions of ‘buy the dip’ have reduced dramatically. However, the charts show that BTC actually forms a ‘real bottom’ whenever social media mentions of ‘buy the dip’ are low. Bull runs were identified in July and October, both preceded by low social volumes. Ironically, higher social volumes correlated with the resumption of the downtrend.

Conclusion

While the odds of a return to $30K were considerably high, there was reason to expect Bitcoin could hold above $33K. The daily RSI was approaching oversold territory, while Santiment suggested that a true bottom could already be underway.

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