Bitcoin closes in on $30K as pressure mounts

With other risk assets rebounding sharply on Monday, there is still hope that cryptos might follow suit and stage a surprise recovery. However, at the time of writing, Bitcoin and other digital currencies were still not showing any signs of life as prices edged further lower towards some key support levels following Monday’s sell-off.
 
Cryptocurrencies were noticeably absent from the risk rally we saw on Monday when stocks, crude and even previous metals staged a comeback, while the dollar fell back. Crypto bulls did not share the same enthusiasm as concerns mount over China’s ongoing clampdown and fears that widespread acceptance of Bitcoin and other digital currencies will be delayed because of concerns about their environmental impact and backlash from environmentalists as mining often uses electricity produced from fossil fuels.
 
With confidence shaken, it looks like crypto investors are in need of some fresh catalyst to encourage them to step back in - perhaps something similar to Elon Musk’s influence to counter the negative influences. But Bitcoin is about 10% or so cheaper than Monday, and bargain hunters will be keen to take advantage of the downbeat prices, once we see signs of a bottom…  
 
Whether we get a fundamental catalyst to turn sentiment around remains to be seen, but the charts currently don’t look too great as prices test the lower end of the recent ranges.
 
For Bitcoin, what I would like to see from a bullish point of view is a key reversal pattern, ideally around the $30K area. Perhaps a temporary breakdown below $30K support and then a quick recovery might provide that signal. Specifically, I would like to see the formation of a daily hammer, or a bullish engulfing candle, combined with a clear signal pointing to a bear trap.



Source: ThinkMarkets and TradingView.com