Bitcoin falls to $36K, traders say bulls need a ‘Hail Mary’ to avoid a bear market

Bitcoin (BTC) price continues to sell-off and the knock-on effect is an even sharper correction in altcoins and DeFi tokens. At the time of writing, BTC price has sank to its lowest level in 6 months and most analysts are not optimistic about an immediate turn around. 

Data from Cointelegraph Markets Pro and TradingView shows that a wave of selling that began late in the day on Jan. 20 continued into midday on Friday when BTC hit a low of $36,600.

BTC/USDT 1-day chart. Source: TradingView

Here’s a check-in with what analysts have to say about the current downturn and what may be in store for the coming weeks.

Traders expect consolidation between $38,000 and $43,000

The sudden price drop in BTC has many crypto traders predicting various dire outcomes along the lines of an extended bear market. Others like independent market analyst ‘Rekt Capital’, are not so quick to jump the gun and declare that all is lost.

As shown in the following chart posted by Rekt Capital, “the recent BTC rejection means that BTC is now residing at the lower region of its current $38,000-$43,100 range.”

BTC/USD 1-week chart. Source: Twitter.

According to Rekt Capital, “Bitcoin is just consolidating inside the $38,000-$43,100 range,” but needs to hold this support level to avoid dropping down into a lower consolidation range.

Rekt Capital said,

“Technically, the $38,000 support area is what separates BTC from entering the $28,000-$38,000 consolidation range. Bitcoin last consolidated in said range in Q1 and Q2 of 2021.”

Head and shoulders pattern confirmed

Analysis of the BTC price action from a purely technical point of view was touched on by David Lifchitz, managing partner and chief investment officer at ExoAlpha, who pointed out that the “giant head and shoulders pattern for BTC is now completed with the neckline broken with BTC at $38,300.”

BTC/USDT 1-day chart. Source: TradingView

From a theoretical standpoint, Lifchitz noted that this pattern predicts a possible drawdown as low as $20,000, but he stated that the “fall has generally been less than that” and suggested that “the $31,000 region could definitely be…

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