Bitcoin Beneath Key Support Level; What’s Next?

Bitcoin Beneath Key Support Level; What’s Next?

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Bitcoin, the flagship cryptocurrency has remained below $40,000 over the past few days. The broader market correction has pushed altcoins to trade below their key support levels. Ethereum was priced below $3000 as the coin was rejected from the aforementioned price level.

Bitcoin’s tough resistance stands at $40,000 as traders continue to exit the market over the last week. In the last 24 hours, BTC had fallen by 3% and in the past week, the coin registered a 6% depreciation. The crypto market continues to be in an accumulation phase.

Increased accumulation is often tied to bullish pressure in the market, however, the market paints a different picture. Higher accumulation is also tied with increased risk/ratio which is basically a bullish indicator for the coin.

Other Metrics To Reinforce That Bitcoin Could Pick Up A Bullish Price Direction

Data from Kaiko display that trade volumes have gone down for both BTC and ETH. The image below depicts the dip in trade volumes seen on major centralised exchanges, it shows how BTC and ETH are at their lowest trade volumes ever since the August 2020 bear market.

Essentially, this could however mean that people might be holding onto their assets as the accumulation phase suggests and that prices are anticipated to go up.

Bitcoin
Bitcoin and Ethereum’s trade volumes are the lowest ever since August 2020. Image Source: Kaiko

Currently, Bitcoin’s short term price action remains bearish amidst a broader market weakness.

Bitcioin Price Analysis: Four-Hour Chart

Bitcoin
Bitcoin is trading is near $39,000 on the four-hour chart. Image Source: BTC/USD on TradingView

Bitcoin was exchanging hands at $38,202 at the time of writing. It broke below its support level of $39,806 in the immediate past trading sessions.

BTC has been battling the $40,000 mark for over a week now. Buyers have exited the market which is why the coin continues to struggle between the range of $40,000 and $38,000 respectively.

In case prices see a turnaround, BTC could trade near $40,000 and a slight push could help BTC touch the $42,000 mark, however, that level might act as a tough resistance for BTC. A fall from the present price will drag the coin to $37,702.

Technical Analysis

Bitcoin
Bitcoin registered a fall in buying pressure on the four-hour chart. Image Source: BTC/USD on TradingView

Bitcoin was seen trading below the 20-SMA mark, a reading that means selling pressure is mounting. Sellers were driving the price momentum in the short term.

Just 48 hours back, buyers had re-entered the market, this amounts to the fact that BTC is trying to rebound on its charts. The coin was briefly placed above the 20-SMA line just 24 hours back until BTC started to exchange for $38,000.

On the Relative Strength Index, buyers have again briefly exited the market and could resurge if demand pushes the coin to rise above 20-SMA.

Bitcoin
Bitcoin presented a green histogram briefly indicating bullishness on the four-hour chart. Image Source: BTC/USD on TradingView

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