The cryptocurrency market faced a new round of sell-off on September 20, as global financial markets fell due to fears of potential defaults Evergrande Group, A real estate company headquartered in China, its failure may cause ripples across the stock market.
Data from Cointelegraph Markets Pro with Transaction view Indicates the early morning sell-off of Bitcoin (Bitcoin) Intensified by midday as the price fell to a low of $42,493, and then the bulls managed to buy it back above $43,500.
As fears intensify and uncertainty spread across the market, the following are analysts’ views on Monday’s price movements and their expectations for the next few days.
Bearish reversal provides warning
Bitcoin’s price drop caught many people in the cryptocurrency market by surprise, but according to analyst and pseudonym Twitter user John Wick, the price action that led to Monday’s pullback formed a confirmed bearish reversal column on the 4-hour chart, indicating this Lifting is an imminent possibility.
This is behind the Evergrade news. We will see how systematic this will become in the next week or two. pic.twitter.com/p1ewjHn6bX
-John Wick (@ZeroHedge_) September 20, 2021
According to the trader, the decline occurred after the latest development of Evergrande. As Bitcoin’s bearish reversal pattern is taking shape, Evergrande really started to attract people’s attention last week.
The developments surrounding Evergrande may take several weeks to play a role in the global financial market and spread to the world, which indicates that traders may experience a period of increased volatility.
Traders are expected to rebound between US$42,000 and US$44,000
The crypto analyst and pseudonymous Twitter user “CryptoCapo” provided insight into key levels. He Post The chart below highlights the support zone between $42,000 and $44,000 and the lower support zone at $38,000.
“I bet a rebound from the blue zone, but if it breaks and retests this zone, the green zone will come into play. Both are good entry prices for the next few months (above $100,000).”
The market looks oversold now
The last point of analysis comes from Scott Melker, a cryptocurrency trader and independent market analyst, who posted the following tweet, showing that the price drop caused an oversold bullish divergence on the 4-hour chart.
Bitcoin 4 hours
Oversold bullish divergence from RSI and above.
Overbought (almost) bearish divergence, RSI is down. I didn’t look at the chart this weekend, I missed it.
Now it is oversold again, and before considering entering the market again, I will observe whether another bullish divergence is formed. pic.twitter.com/Bpu4CtlFIL
-All wolf (@scottmelker) September 20, 2021
As Melk emphasized, the price action of BTC over the weekend issued a warning before Monday’s correction because it formed an overbought bearish divergence and its RSI fell.
Now that the market has returned to oversold conditions, analysts are looking for the formation of another bullish divergence as a signal that it is safe to re-enter the market.
The overall cryptocurrency market value is now $1.952 trillion, and Bitcoin’s dominance rate is 42.5%.
The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading action involves risk, and you should conduct your own research when making a decision.