Bitcoin Consolidating Above $40,000
After experiencing a sharp pullback on Monday, bitcoin is currently consolidating above the $40,000 level. This raises the question of whether the signs are there for a potential move back to the upside.
Fear or Greed?
Over the weekend and into Monday, bitcoin saw a 10% decrease in price, causing an increase in fear among investors. There is concern that the price could dump again, leading to a potential snowball effect of downward momentum.
However, bitcoin seems to have absorbed the recent selling pressure and is showing signs of being ready to reverse the downward move.
Bitcoin Consolidating
Looking at the chart, it is evident that bitcoin has been respecting the 0.382 fibonacci level for the past three days, which also aligns with strong support dating back to early 2021. If the price holds here and bounces, it would be a bullish signal. Additionally, the wicks below indicate that the price is being bought up by the bulls.
Retail Still Unaware
It is important to note that retail investors are still not fully aware of the bitcoin and crypto surge. Many retail investors may still be recovering from losses incurred during their entry into the market in 2021. However, if bitcoin were to reach around $50,000, mainstream interest is expected to increase.
Major Correction Imminent
There is a possibility that this could be the point at which a major correction occurs, with bitcoin potentially retracing all the way back to the $30,000 level. Traders and investors should exercise caution and prioritize risk management.
Hot Take: Bitcoin’s Consolidation and Potential for a Reversal
Bitcoin has undergone a pullback and is currently consolidating above $40,000. While the fear factor has increased among investors, there are indications that bitcoin has absorbed the selling pressure and could be ready to reverse its downward move. The fibonacci level and strong support have contributed to the consolidation, and if the price holds and bounces, it would be a bullish sign. However, retail investors are still not fully aware of the crypto surge, and reaching $50,000 could generate mainstream interest. Although there is a possibility of a major correction, traders and investors should prioritize risk management.
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