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BTC drops below $49.5k key support

The BTCUSD pair logged mild losses on Monday, December 27, down 0.12% to $50,704. Price action climbed to $52,088 during the North American trading session. The gains were driven by a rally in the US stock market. The S&P 500 surged to 4,791.18 yesterday, setting a new all-time high. Sentiment is on the mend despite the rapid spread of the Omicron strain. The dollar also came under pressure on the FX market.

An unsuccessful attempt to breach the $51,800 resistance level led to a 6.6% decline to $48,657. This moved snuffed out bullish sentiment. The price fell quickly without any rebounds. There was no large buying or selling of Bitcoin futures. During the decline, buyers attempted to defend the $50,350, $49,800 and $49,000 levels. Since these levels were of interest to buyers and increased volumes were seen there, they now act as resistance levels.

By the time of writing, price action stabilized above $49k. Sellers have consolidated below the $49.5k horizontal support. Bitcoin positions have been seriously shaken. Consequently, there is now a higher risk of a further decline to the $47,934 (61.8% Fibo retracement level of the leg up from $45,456 to $52,088) - $47,570 zone (trendline from the $42k low).

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