This summary text is fully AI-generated and may therefore contain errors or be incomplete.
A bearish sentiment has taken hold of the cryptocurrency market, raising concerns about a potential significant drop in the price of bitcoin. Since reaching a new high at $38,400, bitcoin has experienced a decline over the past four days, leading some to speculate whether this could be the start of a larger downward trend. The altcoins have also followed bitcoin’s lead, resulting in a collective market capitalization loss of over $30 billion. While there is a possibility of bitcoin returning to its $35,000 support level and the altcoins experiencing substantial losses, it is not considered probable. Traders are advised to “zoom out” and consider the bigger picture, as short-term fluctuations can obscure the overall trend. On closer examination, bitcoin’s short-term time frames still show a series of higher highs and higher lows, indicating an upward trend. However, a dip below $36,650 could potentially break this pattern. When looking at the macro level on the weekly time frame, bitcoin is currently below the crucial $38,000 level, which could serve as a turning point if a retracement occurs. Nevertheless, it is worth noting that bitcoin remains above $35,000. The weekly and monthly closes will provide valuable insights into the future direction of bitcoin as the year comes to a close. While it is impossible to rule out any market scenario, there is a possibility of a bounce in the near future. Traders are advised to exercise caution and employ proper risk management strategies.