Here’s why Bitcoin traders say a drop to $38K is the worst case scenario

The consequences of Recent aggressive comments from the Federal Reserve on rising interest rates as early as March continued to weigh heavily on the crypto market on January 6. The Crypto Fear & Greed Index has dropped to 15 and some traders are lamenting the possible start of a prolonged bear market.

Data of Markets Cointelegraph Pro Y TradingView shows that the bears attempted to challenge the lows set on Jan.5, dropping the price of BTC to $ 42,439 during early trading on Jan.6.

Let's take a quick look at where analysts think price could go in the next few days.

Bitcoin could bottom out between $ 38,000 and $ 40,000

According For Mike Novogratz, the CEO of Galaxy Digital Holdings and a staunch cryptocurrency advocate, this latest move down "has been low-volume" and highlighted the fact that there is a "tremendous amount of institutional demand on the sidelines."

As for whether or not Novogratz sees current market conditions as a good buying opportunity, the seasoned trader told CNBC that he is "waiting a bit longer to buy crypto" and suggested that the market "will be volatile in the coming weeks. ".

Novogratz said,

"Bitcoin could find bottom at the $ 38,000 to $ 40,000 level."

BTC tries to set a higher low

Cryptanalyst and pseudonymous Twitter user Rekt Capital offered a closer look at recent BTC price action, who aware The graph below compares current market conditions to those seen the last time BTC's price fell below its 50-day exponential moving average (EMA).

According to Rekt Captial, BTC "has deviated below the blue 50 EMA" and is now in the process of attempting to set a new higher low (HL) as represented by the green dashed line.

RektCapital said,

“In May 2021, BTC also formed a Higher Low (orange) by deviating below the 50 EMA. BTC held the HL initially, but absorption below was also common. "

Based on the circled section provided in the chart above, Rekt Capital sees the possibility of BTC falling into the $ 40,000 range.

Related: Bitcoin Price Bounces Off $ 42K As Order Book Imbalance Goes 'Crazy'

The price of BTC is in the "golden pocket"

Scott Melker, an independent market analyst, provided a final analysis highlighting the critical crossover the market is at. aware The chart below shows BTC trading between the Fibonacci retracement levels of 0.65 and 0.618.

According to Melker, this range is known as the "golden pocket" and "is considered the most viable place for an asset that is too long or too short and to look for a reversal."

melker said,

"The price is currently in the gold pocket of the move from $ 28,600 to $ 69,000."

The total cryptocurrency market capitalization is now $ 2.077 trillion and Bitcoin's dominance rate is 39.5%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and business move involves risk, you should do your own research when making a decision.