Bitcoin has started the New Year with a period of long-awaited downside price action as it failed to achieve a high above $35,000.
The world’s largest cryptocurrency remains 57% up from this time last month with it currently trading at around $29,000.
The correction had been on the cards for a number of weeks with the Relative Strength Index (RSI) indicating that it was in overbought territory.
The Bitcoin futures market on CME has now filled the gap that was created over the weekend, with trading having resumed at $33,300 despite closing at $29,300.
Whilst bullish traders may be panicking at this morning’s sell-off, it’s worth noting that Bitcoin remains in extremely bullish territory on all higher time frames.
The overall trend continues to be bullish, with even the most conservative price targets forecasting a price increase to at least $50,000 within Q1 of this year.
However, as demonstrated in the 2017 bull market, corrections of up to 30% are commonplace during a parabolic move to the upside and they are actually required to reset a number of key indicators.
If Bitcoin can bounce above the four-hour 21 exponential moving average (EMA) it would instantly regain its bullish posture in the short and medium term, with the $35,000 level remaining a key point of resistance to the upside.
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