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Bitcoin Weekly Roundup: BTC In Pivotal Spot After This Week's 20% Decline

Bitcoin Weekly Roundup: BTC In Pivotal Spot After This Week's 20% Decline

BITCOIN IN A PIVOTAL SPOT AFTER RECENT 20% DECLINE IN PRICE

Last week on Sunday when the most recent article on BTC (BTC/USDT) was published on cryptodaily.co.uk, Bitcoin was fighting hard around the $64k mark to stay above that crucial level of support, which was where the April's ATH had been set as well. We also briefly mentioned that an overly optimistic or simply greedy sentiment of the cryptomarket had been standing out as one of the clear red flags along with the fact that there had been no proper correction for nearly two whole months, precisely since the 7th of September when ,mainly due to the China Evergrande FUD, the BTC's price declined as deep as by 25% within the following two weeks.

What's more, since the very beginning of this ongoing bull-run that started on the 21st of this past July, the largest crypto by market capitalization ($1.1B, down 11% in the last seven days; current domination at 40.3%) had seen only that one single serious pullback that we've just talked about. So, in layman's terms, something had been brewing for a long time and last Monday finally a long overdue crash happened when Bitcoin lost its bloody attempt to defend $64k, which had lasted for nearly six days, but what's even worse, the price action has subsequently fallen below the ascending trendline (purple line in the chart), which originated from the 21st of July.

Investors could have still hoped that the psychological $60k barrier would stop the token's value from more blood and it did at first, albeit only for a couple of days after which the downward momentum has eventually proved to be too strong as evidenced by a grim-looking red candle posted on the daily chart on Thursday. Looking at the Fear & Greed Index today it's fairly clear that market sentiments have completely flipped from 74/100, which indicated Greed last week (and Extreme Greed at 82/100 last month) to a very low reading at 34/100, which obviously represented Fear yesterday. As of now, Saturday the 20th the Index is still signalling Fear among investors at 43/100.


PSYCHOLOGY, EMOTIONS, CORRECTIONS AND... STOICISM

Now, the main reason we are talking in-depth about these previous price movements is simply to remind our readers that such sizeable and rapid decreases in value (which by the way can be even more brutal than the current one without necessarily signifying an upcoming trend reversal on a macro scale at all) are something that's perfectly normal and they ought to be expected at any time practically always. The more one anticipates something like this before it happens, the better they can mentally prepare and the less likely they will be to go into panic and as a result, to make some important decisions based on emotions.

This approach works beautifully in investing as it does in life in general, you should try it if you haven't already and let us know in the comments section what effects you have had with that. While on the subject, the Stoic philosophy seems like a perfect tool that could be added to every investor's arsenal in order to be leveraged for making financial decisions, because it teaches the development of self-control and mental fortitude as a means of overcoming destructive emotions. Controlling one's mental state might be much more vital than any amount of TA, especially in times like these. Okay, now that's out of the way, let's change the scenery from ancient Greece back to the equally interesting contemporary Bitcoin charts, shall we?

TECHNICAL ANALYSIS

One thing that we should notice instantly in the BTC/USDT chart is the fact that Bitcoin has lost many of its key levels of support such as: the four-month old ascending trendline, the $64k level, then $60k as well as the 50-MA. Pretty bad week admittedly but below we still have got the 100-MA (and 200-MA further down), which currently sits around the $53k mark and that level should be considered pivotal as far as maintaining the ongoing bull-cycle is concerned in our opinion. That's exactly the highest price that Bitcoin reached this past September before it went into correction but it had also acted as key support on multiple ocassions going back to April and May earlier this year.

If BTC somehow loses that level, which doesn't seem very likely, then we should look at the round value of $50k for a possible strong bounce to the upside or at least to be established as a local bottom of the current Bitcoin's pullback. That understandably is a bit of a grim short-term scenario but at this point investors should be prepared for anything, even for a dip below $50k, althought the lower the price gets, the more support it should receive.

Now, in order for us to become fully bullish again, BTC has got a long way to go from the current price of $58700 at the time of writing these words. First of all it has to succesfully defend $58k, then it needs to get back above the 50-MA, which should be around $60k. This still will not be enough as Bitcoin wants to return above the most important value, which had been its ATH for half a year prior to establishing the October's record, namely $64k. Once BTC does that and additionally conquers $66k once again, we could be almost certain of setting a new ATH in the weeks that follow.

Hitting $70k and then $73k would be a matter of time as BTC will have established a very strong uptrend at that point. But let's not get ahead of ourselves, The King of all Cryptocurrencies is definitely not out of the woods yet, albeit it seems to be showing the required will to fight having hit the lowest point since mid-October at $55.6k during yesterday's session. Next seven days should reveal to us where the Bitcoin's price will be going in the last month of 2021, so let's keep our eyes open and emotions under control. Regular updates on BTC each week on Saturday at 10:00 AM only on cryptodaily.co.uk.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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