In the last month, bitcoin price saw a significant drop after reaching a 22-month high of $49,000. Currently, the largest cryptocurrency has fallen below the crucial $40,000 markraising concerns about the prospects of the ongoing bull run and the overall structure of the bull market.
However, there are signs that the bottom of the current downtrend may be near, which could set the stage for a possible price reversal.
bitcoin price to avoid falling to $30,000
Market analyst Marco Johanning sheds light on the situation and offers insights into the bitcoin price movement. Johanning suggests that it won't be long until bitcoin reclaims the $41,500 level or potentially rises from a lower level if a specific scenario plays out.
According to Johanning, bitcoin will finally find significant liquidity on the downside. Notably, the price has been below $39,000 several times, indicating the presence of substantial liquidity at these lows.
Furthermore, Johanning addresses the skepticism surrounding the price around $37,800, arguing against widespread expectations of a drop to the low $30,000 range.
Johanning highlights that primary liquidity is below $40,000 and not in the low $30,000 range. Traders who benefited from the low $30,000 range have likely adjusted their stop orders to protect its gains, creating a support layer below the recent equal lows.
As the price begins to reach these stop orders, an automatic sell occurs, driving the price lower until it encounters significant buying pressure. The analyst notes a daily order block at $37,700 and high time frame (HTF) support at $38.5000, indicating the potential for notable buying pressure in these price regions.
Johanning also highlights the possibility of filling Chicago Mercantile Exchange (CME) gaps and imbalances, with the next anticipated imbalance below $33,000.
Is Short Squeeze Rally Imminent?
According to Johanning, the prevailing sentiment reveals that many bears are hoping to short a market dump. Johanning predicts that a short squeeze could occur once the price reverses, leading to a rapid price increase.
In terms of Fibonacci retracement levels, Johanning suggests that since bitcoin price has already lost the $40,200 level, it could fall to the 0.5% Fibonacci level, which matches those above the $37,800 level .
Johanning speculates that the price may briefly touch $37,800 before closing above the HTF support level of $38,500, setting the stage for a possible bullish move.
The recent downward trend in the price of bitcoin has raised concerns about the continuation of the bull run. However, market analyst Marco Johanning presents several key arguments supporting the possibility of a price reversal.
With bitcoin's current price at $38,900, there is potential for increased buying pressure in this region. The support wall at $38.5000 has shown resistance so far, and its performance will be closely watched.
If the support wall does not hold, the market will watch how the $37,800 price level behaves and whether it aligns with the analyst thesis.
Featured image from Shutterstock, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent NewsBTC's views on whether to buy, sell or hold investments, and investing naturally carries risks. It is recommended that you conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.
