Bitcoin targets $50,000 after signaling the bottom of its recent correction
Green prevails in the cryptocurrency market on Tuesday, as a small Christmas rally seems to be in reach after its recent correction of several weeks. Although Bitcoin and Ethereum haven´t taken off just yet, some 'altcoins' are in full bull run and are drawing analysts' attention to their huge potential for decentralized finance. Specifically, the tokens of Terra (LUNA) and Avalanche (AVAX) stand out above the rest on a day in which rises of 10% are the keynote among the largest capitalization digital currencies.
These events raise the total value of cryptoassets to $2.3 trillion, straddling all-time highs, like LUNA, which is changing hands at $92, while AVAX looks set to surpass its all-time milestone at $127. Ripple is also up 10% and Polkadot is up 5%. However, Ethereum is up less than 1%, as it continues to struggle with the $4,000 resistance, which was formerly its support. Bitcoin leaves similar rises, but its outlook is more promising as it aims decisively at $50,000, where it has also located an important resistance that has slowed its advance since the 'flash crash' of December 4th.
Experts indicate that the queen of cryptos is keen to continue its recovery after once again finding support at around $45,500. "It's been an unusual period of stability for the cryptocurrency as we head into the end of the year which may signal a bottom is forming since falling more than 30% from its peak," noted Craig Erlam, analyst at Oanda. "It's been a busy year for cryptocurrencies, it will be interesting to see what 2022 has in store," he added.
Bitcoin still faces medium-term bearish pressure, as charts suggest that the world's most traded cryptocurrency is "not yet oversold," according to Katie Stockton, founder and managing partner of Fairlead Strategies. At the same time, trading volume on major trading platforms remained low on Monday, according to data compiled by 'CoinDesk'.
Bulls have been defending the 200-day simple moving average slightly above $47,000 over the past few days, but have not been able to push the price above the 20-day exponential moving average ($49,622), as technical analysis indicates. This demonstrates the lack of demand at the higher levels, as the bearish are trying to push the price below $46,000. If Tuesday's rebound is denied, there are risks that Bitcoin could end up at $42,000 in the coming days. Also, market watchers noted that volumes remain low on crypto exchanges as well.
"Falling trading volumes could complicate price action," stated Edward Moya, senior market analyst at Oanda, noting that Bitcoin pricing could be "very choppy" in the coming weeks. "Many investors remain bullish for the long term and uncertainty about potential short-term pain has many traders waiting until Bitcoin falls toward the $40,000 level," he commented.