Possible bearish scenario suggests a correction to $27,000 for Bitcoin
Analysts say the possibility of a crash to $27,000 for BTC should not be ruled out: such a development would „annihilate“ the altcoins
Some analysts argue that the price of Bitcoin (BTC) could collapse to $27,000 if the support zone at $30,000 fails.
The potential decline towards $27,000 depends on the ability of Immediate Bitcoin bullish traders to protect support at $30,500, where BTC bounced back with considerable strength on January 11.
Where is Bitcoin’s near-term low?
In the near future, there are three key technical levels for Bitcoin to follow: $34,500, $30,500 and $27,000.
Over the past 72 hours, $34,500 has acted as a critical support zone. Each time BTC has visited this level, it has recovered fairly quickly to around $36,300.
If the $34,500 does not hold, the next important support level is at $30,500, the point where Bitcoin began to recover ground after the big correction on January 11, an event that resulted in liquidations of $2 billion worth of futures contracts.
A pseudonymous trader known as „Alex,“ for example, said that if Bitcoin returned to $30,000 without a visible reaction from buyers, the ideal move would be to wait for $27,000 or a bullish move above $30,000:
„Decision-making is dynamic. Nothing is set in stone. But in all likelihood if the price comes back towards $30,000 I will stay on the sidelines. The plan is to have resources to buy the correction (to be reallocated). If the $30,000 doesn’t hold, no buying until the price gets to $27,000 or back above $30,000.
Similarly, another popular pseudonymous trader known as „Mayne“ has indicated that losing $33,000 will likely result in a correction to $27,000. On January 18, prior to the opening of the weekly candle, the trader tweeted:
„I believe the $33,000 will hold and we will track a strong rebound on Monday. If we lose this level, Bitcoin is a scam and I deny any association of mine up to $27,000.“
What happens to altcoins if the $30,000 doesn’t hold?
Alex pointed out that should Bitcoin plummet to $27,000, the altcoins will likely be „wiped out“ with corrections of between 30% and 50%.
Typically, altcoins are less liquid and have much lower volume than Bitcoin. Therefore, during a bearish cycle, altcoins often experience deeper pullbacks compared to BTC. The trader explained:
„If for any reason $BTC falls to $27,000, expect altcoins to be annihilated with intraday pullbacks of 35%-50%. In this scenario, buying altcoin will be better than buying $BTC. Surely buying altcoins at that level will be more beneficial than leveraged positions in $BTC. Spot the winners and jump in.“
Bitcoin is currently tracking a slow recovery from the support level at $34,500, a move that reflects an uptrend. This support coincides with a whale cluster, which are likely protecting the level with buy orders.
The presence of the whale cluster at $34,500 explains why Bitcoin has seen strong bounces from this area over the past 48 hours. In the short term, the key to a convincing recovery is to protect this level.