Bitcoin (BTC) continues to be in correction manner with BTC price dropping below $17,600 on Dec. xi, the lowest level since November.

Bitcoin in a downtrend on lower timeframes

Every beautiful rally comes to an terminate and gets followed past a cosmetic period. This correction seems to take started with the toll currently downwards more than than 10% since touching a new all-time high ten days agone.

Meanwhile, some recent news namely the proposed crypto regulation in the United States is bringing fear to the otherwise euphoric market. Withal, other markets have too suffered this week with equities likewise cooling off.

BTC/USD 4-hour chart. Source: TradingView

The four-hr chart is implying a clear downtrend. Such a downward trend is confirmed by lower highs and lower lows, as shown in the chart.

First, Bitcoin's price couldn't suspension through the best high region, after which $18,500-18,700 acted as a strong support expanse for a week.

Every bounce from this region (as the arrows show) marked a weaker bounciness, as lower highs were constantly formed. After three tests, the back up failed, and Bitcoin's price fell through to the side by side support level betwixt $17,600-17,800.

This support zone initiated a slight bounce to $18,500-eighteen,700. To become bullish, this zone had to flip for support, which it failed to practise. This rejection confirmed the bearish support/resistance flip, later on which the downtrend resumed.

Overall, the downtrend will post lower highs and lower lows e'er until a articulate bottom is found. Information technology doesn't seem similar the market will notice it presently, even so, equally college timeframes are also eager to plough south.

Bearish divergence on the daily timeframe getting confirmed

BTC/USD 1-day chart. Source: TradingView

The daily chart indicates a potential bearish divergence set to exist played out. This bearish divergence will exist confirmed when the price of Bitcoin falls to break through $18,600-18,800.

In that sense, a previous resistance becomes resistance again, confirming the markets' overall weakness and more downside becoming probable.

Based on the daily chart, the support zone is at $16,000, as Bitcoin'southward cost bounced strongly from that region last calendar month. It's the first massive support zone on the daily timeframe every bit well.

To become bullish in the short term, Bitcoin's cost has to reclaim the $18,600-18,800 area for support. That would invalidate the bearish divergence and any bearish outlook for the meantime.

Total market cap eyes $400 billion

Full market place capitalization ane-twenty-four hour period nautical chart. Source: TradingView

The total market capitalization chart of cryptocurrencies showed a massive rally toward $600 billion. This marker was also the 1.618 Fibonacci level, which is one of the most vital Fibonacci levels.

More importantly, the total market capitalization nautical chart showed a college high at $600 billion. This higher high means that the marketplace is in balderdash territory and will be looking for a new higher depression to ostend this uptrend.

The levels to watch on the total marketplace capitalization chart are around $470 billion and most likely the area around $400 billion. The latter is the previous resistance zone and should be watched for a potentially beautiful support/resistance flip.

More downside for BTC will not benefit altcoins. Correlations are notwithstanding very loftier in the cryptocurrency markets, which ways that altcoins volition well-nigh likely suffer from any Bitcoin correction.

Withal, once Bitcoin finds its next lesser, altcoins will likely exist well-positioned to outperform Bitcoin on shorter time frames once again.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risk. You should comport your own research when making a determination.