Watch below! Analysts Eye Bitcoin Price at $40,000 After Drop to $45,700

Bitcoin's short-term outlook deteriorated further on Monday, with its price falling to an intraday low of $45,672, a far cry from the $50,000 level expected to break through last weekend.

As the year draws to a close, with all-time highs approaching 33%, traders are likely to recalibrate their expectations and push the $100,000 BTC target further into 2022.

Day traders, 4-hour chart watchers, and overleveraged bulls are likely to crash (unless they go short from $50,000 over the weekend or this morning's weakness), but let's zoom out a bit and look at bitcoin The price of the coin.

On the daily time frame, we can see that the price is struggling to break out of the daily lower high trend, and aside from the drop to $42,000 on Dec. 4, traders seem wary of buying into the recent dip.

Tracking moving averages has always been a relatively easy way to swing trade BTC, with the 20-day moving average (blue) currently below the 50-day moving average (orange). Some traders simply buy when an asset secures a daily close above the 20-MA and sell when the price falls below the 20-MA as a sign of a weakening short-term trend.

Following this approach, momentum traders may wait for BTC to secure a daily close above the moving average of $53,000 before entering new long positions. More risk-averse traders might consider waiting for a convergence between the 20-MA and 50-MA as a clearer signal of a trend reversal. A quick look at the price action over the past year proves that this strategy is quite effective.

Why some traders expect more downside

More experienced traders know that Bitcoin prices tend to form double tops, M tops, and head and shoulders tops after hitting new all-time highs. Recently, analysts on crypto twitter noted what they see as a double top, a clear trend reversal pattern.

Looking at the daily time frame, we can start to see the start of what looks like a head and shoulders pattern. The current decline and subsequent consolidation may finally complete the right shoulder, with a neckline at $41,500 and a price target near an impossibly low number, so I won't write here.

Traders will also note that the neckline of the aforementioned head and shoulders pattern coincides with a large gap on the Volume Profile Visible Range (VPVR) indicator, which shows increased buying interest at the $40,000 level.

At present, it is too early to make a fuss about the existence of the H&S pattern, especially since the analysis of price action cannot be determined by a single indicator, but it is still something worth noting.

Data from Whalemap, an on-chain analysis agency, also pointed out that the $40,000 level is an area that needs to be watched closely. In an interview with Cointelegraph, analysts at Whalemap said:

“Basically, if we start to close the daily candles below the aforementioned support level, we will probably look for a lower one. The closest we have below is around $40,000”.

While Bitcoin's current price action isn't giving confidence to traders who bought high in December or expected to trade in the $74,000-$80,000 range, analyst Mohit Sorout recently pointed out that, as it turns out, negative funding fees The stage is a good buying opportunity.

On the daily time frame, the moving average convergence divergence (MACD) and the relative strength index (RSI) are also oversold, both of which have historically pointed to an accumulation phase and dollar cost averaging into new long positions. Chance.