The cryptocurrency market faced a new round of selling on September 20 as global financial markets fell under pressure amid fears surrounding the potential default of Evergrande Group, a China-based real estate company whose collapse could have repercussions on the stock markets.
Data from TBEN Markets Pro and TradingView shows that the morning bitcoin (BTC) sell-off intensified until noon as the price fell to a low of $ 42,493 before the bulls managed to put it back. above $ 43,500.
As fear grows and uncertainty spreads throughout the market, here’s what analysts are saying about Monday’s price movement and what to expect in the days ahead.
The bearish reversal provided a warning
Bitcoin’s price decline surprised many in the crypto market, but according to analyst and pseudonymous Twitter user John Wick, the price action leading up to Monday’s pullback formed a confirmed bearish reversal bar. on the 4 hour chart, signaling that movement was an imminent possibility.
This comes as a result of the Evergrade news. We’ll see how systemic it gets over the next couple of weeks. pic.twitter.com/p1ewjHn6bX
– John Wick (@ZeroHedge_) September 20, 2021
According to the trader, the decline follows the most recent developments regarding Evergrande which really started to gain attention last week as the bearish reversal pattern for Bitcoin was forming.
It will likely take several weeks for the developments surrounding Evergrande to occur and spill over into global financial markets, indicating that traders may be in a period of heightened volatility.
Traders expect a rebound between $ 42,000 and $ 44,000
An overview of the key levels to watch was provided by crypto analyst and pseudonymous Twitter user “CryptoCapo,” who job the following chart highlighting the support area between $ 42,000 $ 44,000 and a support area below $ 38,000.
“I’m betting for a rebound of the blue zone, but if it breaks and retest that zone, the green will be on the line. Both are good entry prices for what’s to come in the next few months ($ 100,000 +).
Related: Here’s why Bitcoin might be immune from a global stock market crisis
The market now seems oversold
A final analysis came from crypto trader and independent market analyst Scott Melker, who posted the following tweet showing that the price decline led to an oversold bullish divergence on the 4-hour chart.
$ BTC 4 HOURS
Oversold bullish divergence with RSI and on the upside.
Bearish (almost) overbought divergence with RSI and on the downside. I wasn’t looking at the charts this weekend, I missed it.
Oversold again now, I will watch for the formation of another bullish divergence before considering another entry. pic.twitter.com/Bpu4CtlFIL
– The wolf of all the streets (@scottmelker) September 20, 2021
As Melker pointed out, BTC price action over the weekend gave a warning ahead of Monday’s pullback as it formed an overbought bearish divergence with its drop in its RSI.
Now that the market has become oversold again, the analyst is looking for another bullish divergence forming to signal that it is safe to re-enter the market.
The overall cryptocurrency market capitalization now stands at $ 1,952 billion and Bitcoin’s dominance rate is 42.5%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of TBEN.com. Every investment and trading move comes with risk, you should do your own research before making a decision.