The recent decline in global markets has not ceased. Led by Bitcoin, cryptocurrencies also suffered from these declines. The leading cryptocurrency entered a downtrend after hitting an all-time high around $69,000. It fell below the $35,000 level for the first time after a long break. While those who have coins wonder when this persecution will end, those who want to evaluate their cash are looking for bottom levels. So where is the bottom?
What’s the Bottom in Bitcoin?
First, take a look at the major support and resistance levels. At the bottom, the blue level is our major support level. The blue level, which represents the 28,000-30,000 band, was previously defended by strong buyers. Likewise, it is a level surrounded by strong buy orders. This level seems hard to break.
Another major level is orange. This level marks the latest volume drop in Bitcoin. After breaking the orange level of $39,000-40,000, a strong decline came. With this decrease, we have entered the band of 30.000-40.000 Dollars again.
I do not expect a rapid recovery in the price due to both the strong selling wave that broke the supports one by one and this band gap where we lingered for a long time before. So there’s no need to rush into poses. Especially at such times, it is very important not to take serious exposures in altcoins (which I will talk about).
On the other hand, we cannot help but touch on the averages, which will give us an important bottom signal and an uptrend clue.
What Do Averages Say About The Bottom?
Normally, Bitcoin has entered the blue buying zone. However, I am not buying yet. The reason is that the averages have not bottomed yet and I am not convinced that the current downtrend is over. Especially the green mean seems to have a way to go.
In the chart above, I would like to tell you how a possible bottom can work. I maintained the green, which is the 50-day average, and the red, which is the 200-day average. I created a representative bottom scenario. In the previous Bitcoin drop, the green average made a similar bottom. The level where the average found the bottom, then turned horizontal and then turned upwards was the most suitable level for buying.
A similar structure is formed now. For this reason, it is important to wait for the green average to bottom out for buying. Let’s come to the most important part here, namely the crux of the matter.
The orange level in the chart above is the forward projection of the price. The level where the orange throws over the green is the most suitable level for buying. Therefore, it is important to wait for the price to jump above the 50-day average to buy. This will show us that the trend is starting to turn up. For this reason, it is a critical level for taking a position and creating a portfolio. I have frequently referred to these averages in my previous analyses.
I insist on analyzing the market and writing articles. My friends, follow this analysis. Some very basic and very clear structures are formed. Do not overlook these. I was not caught in this downtrend that has been going on for a long time. The reason is my analysishttps://t.co/7ECL7gYe4v
— Furkan Bozkurt (@BzkrtFrkn) January 21, 2022
However, it is normal to wait for the price to calm down and accumulate a bit before turning up. For this reason, it is important to wait for this signal for an upward turn for now.
What is the situation with altcoins?
On the altcoins’ side, the negative atmosphere continues. In the Bitcoin domination chart you see below, the 40 level (purple) still remains as support. This is the third time we’ve tried this level and it’s still unbearable. In order for altcoins to continue their upward movement, it is important that the dominance can fall. For now, this does not seem possible. The purple support level is unbearable.
The periods when Bitcoin dominance fell sharply constitute a bullish period for altcoins. During these periods, we observe sharp rises in altcoins. Then the dominance goes horizontal. This period is the pause period. And finally, dominance starts to rise again. We can call this period the regression period.
$BTC price hit the $69,000 level and has been falling ever since. There is a clear downtrend. Need to see the trend turn. So, what’s one of the easiest ways to understand this? Averages. They are little affected by short-term movements. Therefore, they show the trend.
— Furkan Bozkurt (@BzkrtFrkn) January 21, 2022
There is a negative outlook for altcoins in the medium-long term. Currently, dominance marks a stagnation period for altcoins. And the next step may be a period of regression. Of course, this is a scenario for medium-long-term investors. Short-term investors should closely follow the part about Bitcoin and averages that I mentioned above. I will create a new portfolio when I see the upside reversal signal in Bitcoin. For this reason, do not forget to follow my analyzes closely.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.