Bitcoin price correction continues, dashing hopes of reaching $20,000 by 2020

Bitcoin will probably not reach $20,000 this year if a key technical price level is not recovered soon.

 

Bitcoin (BTC) remains in correction mode: the BTC price fell below $17,600 on December 11, the lowest level it has reached since November.

 

Bitcoin is in a downward trend

Each beautiful rally comes to an end and is followed by a period of correction. This correction seems to have begun with the current price, which has dropped more than 10% since reaching a new all-time high ten days ago.

 

In the meantime some recent news, such as the proposed regulation of cryptomonies in the US, is bringing fear into the otherwise euphoric market. However, other markets have also suffered this week; stocks are also cooling.

 

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BTC/USD 4-hour chart. Source: TradingView

The 4-hour chart shows a clear downward trend for this pair. This trend is confirmed with lower highs and lower lows, as shown on the chart.

 

Firstly, the price of Bitcoin failed to break out of the region of historical highs, after which the $18,500-18,700 level acted as a strong support zone for a week.

 

Each bounce from this region (as shown by the arrows) marked a weaker bounce, while lower highs formed constantly. After three tests, support failed, and the price of Bitcoin fell to the next support level, between $17,600 and 17,800.

 

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This support zone began a slight rebound to the $18,500-18,700 level. To become bullish, this zone had to gain support, which it failed to do. This rejection confirmed the downward turn of support/resistance, after which the downward trend resumed.

 

In general, the downtrend will register lower highs and lower lows always until a clear bottom is found. However, the market does not appear to be discovering this anytime soon, as the highs are also coming down.

 

The downward divergence in the daily time frame is confirmed

 

BTC/USD, 1-day chart. Source: TradingView

The daily chart indicates a possible downward divergence ready to take place. This bearish divergence will be confirmed when the Bitcoin price falls above $18,600-18,800.

 

In that sense, a previous resistance becomes resistance again, confirming the general weakness of the markets and making the fall more likely.

 

According to the daily chart, the support zone is at $16,000, as the Bitcoin price rebounded strongly from that region last month. It is also the first massive support zone on the daily chart.

 

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To become bullish in the short term, the price of Bitcoin has to recover the support zone of $18,600-18,800. That would invalidate the bearish divergence and any bearish outlook for the time being.

 

The total market capitalization is $400 billion

 

Chart of total market capitalization in one day. Source: TradingView

The graph of the total market capitalization of cryptosystems showed a massive increase to $600 billion. This marker was also the Fibonacci level of 1618, which is one of the most vital Fibonacci levels.

 

More importantly, the total market capitalization chart showed a higher maximum of $600 billion. This high means that the market is in bullish territory and will be looking for a new higher low to confirm this upward trend.

 

The levels to be seen on the TMC chart are around $470 billion and most likely the area around $400 billion. This latter is the previous resistance zone and should be seen for a potentially beautiful turn of support/resistance.

 

More losses for BTC will not benefit the altcoins. Correlations are still very high in the cryptomone markets, which means the altcoins will probably suffer any Bitcoin correction.

 

However, once Bitcoin finds its next bottom, altcoins are likely to be well positioned to outperform Bitcoin in shorter time frames once again.