Stock sell-off boosts Bitcoin price, but traders expect a rally of nearly $ 42,000
The crypto market faces another sell-off on September 20 as global financial markets come under pressure on concerns over a possible default by Evergrande Group, a US-based real estate company.
Data from Cointelegraph Markets Pro and TradingView showed that the early morning Bitcoin (BTC) sell-off intensified until noon when the price fell to a low of $ 42,493 before the bulls tried to push the price back above $ 43,500 .
Amid mounting fear and uncertainty spreading in the market, analysts say the following about Monday’s price move and what to expect in the days ahead.
A bearish reversal is a warning
Bitcoin’s price drop has taken many in the crypto market by surprise, but according to analyst and Twitter user John Wick, the price action that led to Monday’s retreat formed a reversal bar, and the price drop is confirmed on the 4-hour chart, signaling that this movement is an immediate possibility. .
This appeared on the back of the Evergrade news. We’ll see how systematic this gets over the next week or two. pic.twitter.com/p1ewjHn6bX
– John Wick (@ZeroHedge_) September 20, 2021
According to the trader, the decline follows recent developments related to Evergrande, which really caught attention last week at a time when a bearish reversal pattern was forming for Bitcoin.
It may take several weeks for Evergrande developments to make themselves felt and spread in global financial markets, suggesting that traders are facing a period of increased volatility.
Traders expect a rally from $ 42,000 to $ 44,000
The crypto analyst and Twitter user with the nickname “CryptoCapo” provides insights into the most important levels to be observed sent The graph below highlights the support area between $ 42,000 and $ 44,000 and the lower support at $ 38,000.
“I bet a rebound from the blue zone, but if he breaks that zone and tests again, the green zone will be played. Both are good starting prices for the coming months ($ 100,000+). “
Related: Here’s Why Bitcoin Could Be Safe From The Global Stock Market Crash
The market seems oversold at the moment
One final analysis comes from independent crypto trader and market analyst Scott Melker, who posted the following tweet showing that the price drop has resulted in an exaggerated bullish divergence on the chart.
$ BTC 4 HOURS
Oversold bullish divergence with RSI up.
Overbought (almost) bearish divergence with RSI and bearish. I didn’t look at the chart this weekend, I missed it.
Now oversold again, I will look for another bullish divergence before considering another entry. pic.twitter.com/Bpu4CtlFIL
– The wolf of all streets (@scottmelker) September 20, 2021
As pointed out by Melker, BTC’s weekend price action warned of Monday’s pullback as it formed an overbought bearish divergence with a falling RSI.
Now that the market is back in oversold territory, analysts are looking for another bullish divergence, which is a signal that a safe re-entry into the market is possible.
The total crypto market cap is $ 1.952 trillion and the dominance of Bitcoin is 42.5%.