ScienceLovers - Last week, Bitcoin (BTC) ended it with a bit of a trick to investors, where the price recovery efforts that occurred still ...
As you can see, there are some positive sentiments present for this major cryptocurrency, such as a recent purchase from El Salvador which cost the coin up to US$15 million.
Psychological Trap
In investment science, psychology is one of the factors that play an important, even central, role in the formation of medium and long-term prices.
That's because humans are involved in it, so if you swallow the signals given by the price, you may be caught in a "psychological trap" in the crypto market.
A real example is, on Sunday morning (24/1/2022), the price tried to rise slowly and consistently, but in the end it was countered again.
Of course, there are some people who buy when the price recovers, who have been caught by false signals from the market.
For traders, this may be a good trading momentum. However, for investors, this can sometimes cause painful trauma and make doubts even greater.
After a free fall since mid-November 2021, the prices of the majority of crypto assets, including Bitcoin, are still depreciating “vigorously”.
This marks a major concern from investors, which of course is one of the policies of the US central bank, the Fed, which is pulling the prospect from the US dollar.
Indirectly, this suppresses the market's risk appetite resulting in reduced interest in risky assets such as cryptocurrencies. Market capitalization was eventually drained quite a lot.
Bitcoin Technical Analysis (BTC)
What's interesting is, when you look at the candlestick after the first drop the price from ATH US$64,000, which, technically, is under strong pressure. It happened during the May 2021 crash.
The price continues to recover but not as fast as it fell in May, so as you can see, slightly forming a new ATH, the price is falling again.
This creates a painful scheme, where the price can continue to enter the support area, even break it down, before actually trying to find a foothold to rise.
It is feared, the pandemic issues and the Fed's policies will make prices move lower than the main psychological level, US $ 30,000.
Technically, the area between US$25,000 – US$30,000 is a potential area to try to find new footing if that psychological level is broken.
However, if the price gets a strong buyback attempt at the support area (not breaking US$30,000), then the potential for a rally will be stronger if it is able to move higher than the psychological level above it, at US$40,000. Less than that level, this is still worrying.
Patience still seems to be the key to our salvation in crypto assets. Lets watch.
