Over the past month, Bitcoin price has seen a significant decline after reaching a 22-month high of $49,000. Currently, the largest cryptocurrency has fallen below the crucial level $40,000 markraising concerns about the prospects of the continued bull run and the overall bullish market structure.
However, there are indications that the bottom of the current downtrend may be near, potentially paving the way for a potential price reversal.
Bitcoin price to avoid falling to low $30,000
Market analyst Marco Johanning sheds light on the situation and offers insight into Bitcoin’s price movement. Johanning suggests that it won’t be long before Bitcoin regains the $41,500 level or possibly rises from a lower level if a specific scenario unfolds.
According to Johanning, Bitcoin will eventually face significant liquidity on the downside. Notably, the price has remained below $39,000 several times, indicating the presence of substantial liquidity at these lows.
Additionally, Johanning addresses the skepticism surrounding the price of around $37,800, pushing back against widespread expectations of a drop to the low $30,000 range.
Johanning emphasizes that primary liquidity is below $40,000 and not in the low $30,000 range. Traders who took advantage of the low $30,000 range likely adjusted their prices stop orders to protect their gains and create a layer of support below the recent flat lows.
As the price begins to reach these stop orders, automatic selling occurs, continuing down the price until there is significant buying pressure. The analyst points to 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 emphasizes the chance of filling Chicago Trade Fair (CME) gaps and imbalances, with the next imbalance expected below $33,000.
Short squeeze rally imminent?
According to Johanning, the prevailing sentiment shows that many bears are waiting for a short a dump market. Johanning predicts that a short squeeze could occur once the price reverses, which could lead 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 potentially decline towards the 0.5% Fibonacci level, which coincides with that above the $37,800 level.
Johanning speculates that the price could briefly touch USD 37,800 before closing above the HTF support level at USD 38,500, paving the way for a potential upside move.
The recent one 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 the possibility of increased buying pressure in this region. The $38,500 support wall has shown resilience so far and its performance will be closely watched.
If the support wall does not hold, the market will observe how the $37,800 price level performs and whether it is in line with the analyst’s thesis.
Featured image from Shutterstock, chart from TradingView.com
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