Bitcoin’s price correction continues, extinguishing hopes of $20,000 in 2020

If a technical price level is not reclaimed soon, Bitcoin is likely not to reach $20,000 by year-end

Bitcoin (BTC) continues its correction phase: today the price of BTC fell below $17,600, the lowest level since November.

Bearish trend for Bitcoin on shorter intervals
Sooner or later every rise comes to an end and is always followed by a corrective period. Such a correction seems to have started for Bitcoin, given the current drop of more than 10% since the price hit a new all-time high ten days ago.

Meanwhile, recent news (including proposed crypto legislation in the US) is bringing fear into an otherwise euphoric market. However, the crypto sector wasn’t the only one to suffer this week: just look at the stock market.

The 4-hour chart suggests a clear bearish trend. This trend is confirmed by decreasing highs and lows as shown in the chart.

First of all, Bitcoin’s price failed to break through the all-time high area, and then the $18,500-$18-700 range provided strong support for a week.

Each bounce from this region (as indicated by the arrows) proved to be weaker and weaker, consistently drawing declining highs. After three attempts, the support did not hold and the price plunged towards the next support level, between $17,600 and $17,800.

This support zone triggered a slight bounce towards $18,500-$18,700. To form a bullish scenario, Bitcoin should have turned this zone into support. However, it was rejected, confirming the support/resistance reversal and restoring the bearish trend.

Overall, the trajectory will see decreasing highs and lows until the price finds a clear bottom. It doesn’t look like the market is going to find it anytime soon, as even extended ranges are eager to turn down.

Possible bearish divergence on daily chart
Daily chart of BTC/USD
Daily chart of BTC/USD. Source: TradingView
The daily chart indicates a potential bearish divergence Crypto Trader ready to enter the scene. This divergence will be confirmed if Bitcoin’s price fails to break out of the range between $18,600 and $18,800.

In that case, a previous resistance resumes its old role, reaffirming the general weakness of the markets and suggesting further losses.

According to the daily chart, the support zone is located at $16,000, as Bitcoin’s price recovered strongly from this region last month. It is also the first huge support range on the daily chart.

To turn bullish in the short term, Bitcoin price would have to claim the $18,600-$18,800 area as support. This move would invalidate the bearish divergence and any pessimism for a while.

Total market cap aims at $400 billion
Daily chart of total market capitalisation
Daily chart of total market capitalization. Source: TradingView
The cryptocurrency total market capitalization chart shows a huge uptick towards $600 billion. This milestone corresponds to the Fibonacci 1,618 level, which is considered one of the most important.

More importantly, the total market cap chart has recorded a rising high at $600 billion, indicating that the market is in bullish territory and will look for a new rising low to confirm the trend.

The levels to watch on the total market capitalization chart are around $470 billion and most likely the area near $400 billion. The latter represents previous resistance and should be watched for a potential reversal of perfect support/resistance.

A further contraction of BTC would not be good for altcoins. Correlations in crypto markets are still high, so it is very likely that any correction in Bitcoin will make altcoins suffer as well.

However, once Bitcoin reaches its next bottom, altcoins will likely be in a great position to outperform the main cryptocurrency again in the short term.