Bitcoin Slips on China and BTC Traders Expect the Worst, will $42k Hold?

Bitcoin sets the pace in crypto.

Being king, the coin—as history shows—determines the volatility of altcoins.

At the time of writing, BTC prices are relatively weak, subsequently pulling other assets as a result.

Bitcoin Market Performance and Price Status

Even so, traders are confident that BTC prices would recover in the medium term, citing fundamental factors as primers.

For now, the path of least resistance is southwards.

Following the bear bar of September 24, this week’s candlestick will likely close as bearish reaffirming selling pressure of last week and continuation of weakness as per the September 7 bear candlestick.

That the spring-back of mid-week wouldn’t last was evident from the candlestick arrangement. Despite the pullback and the wide-ranging bar igniting transient demand, the accompanying trading volumes were negligible relative to September 20 bear bar.

Both were defining but not climactic as per the subsequent affirmation of September 24 from a volumes analysis since sellers are now back in control, peeling back gains.

Technically, Bitcoin traders remain apprehensive. Savvy, risk-off traders might find entries in lower time frames to unload the pullbacks targeting $40k and $36k in the immediate term.

At spot levels, BTC is in a precarious, dicey position, especially for buyers.

Trending at around January 2021 highs—a crucial support level—the reaction at spot levels would determine how prices behave in short to medium term.

Deeper losses might spell doom for optimistic bulls while recovery above $47k, and this week’s range could ignite buying pressure. The resulting lift-off would see Bitcoin float back to $60k.

Blame Bitcoin Losses on China?

China’s announcement of banning cryptocurrency trading for the umpteenth time saw BTC prices dump. However, this wasn’t new though its impact on the market was felt slightly.

In the days ahead, a trader thinks the best approach is to watch how price action pans out—reaction at $50k and $42k, respectively.

The divider, in this case, is the 200-day moving average which acts as flexible support. If BTC prices tank to the downside, the odds of the coin reaching $30k in an escalated liquidation would be highly likely.

Conversely, if BTC/USD prices continue to chart higher, a break above $50k might restore bullish sentiment.

In that likelihood, there wouldn’t be anything stopping Bitcoin from reaching $57k or even $60k in the medium term.

Bitcoin Back to $40k

For now, sellers are in firm control, observes one trader on Trading View.

Per the analyst’s view, a comprehensive close below $42k may see the Bitcoin price drop to $40k based on the 1HR price action.

From the 1HR-chart, the BTC price is within a bearish breakout pattern visible following sharp losses of September 24.

Nonetheless, there has been a recovery, but the trend has been defined—and sellers are in the driving seat.

Bitcoin Weak, Bears Targeting $30k?

Yet on Twitter, an analyst picks out more flashing lights warning of potential draw-down.

The analyst thinks the BTC price can slips more towards $30k in the upcoming sessions considering the current state of affairs.

BTC/USD | $BTCUSD | $BTC $USD

Big BTC sell starts at 43600 to 29k

Long or short it with BTC on Trade8: https://t.co/4Ju6zFUOyv pic.twitter.com/Fgvg03368G

— Crypto Blitz (@trader_blitz) September 25, 2021

Per his analysis in the 4HR chart, BTC/USD prices are trading below the Guppy—an MA-based indicator—pointing to intense selling pressure.

Besides, the coin could likely break below a wedge—a loss that may see prices tank below $40k towards $30k—or worse.

Charts courtesy of Trading View

Disclaimer: Opinions expressed are not investment advice. Do your research.