Bitcoin Price Analysis: Total bloodshed as BTC falls below $40,000, where to next?

Description

TL;DR Breakdown Bitcoin price analysis highlights BTC’s breakdown past its critical support line at $42,000. The latest price breakdown paves the way for further bearish movements. If Bitcoin plunges past the 200 Simple Moving Average, the king crypto will incur enormous losses pushing it towards the $30,000 region. At the time of writing, the number … Read more

TL;DR Breakdown

  • Bitcoin price analysis highlights BTC’s breakdown past its critical support line at $42,000.
  • The latest price breakdown paves the way for further bearish movements.
  • If Bitcoin plunges past the 200 Simple Moving Average, the king crypto will incur enormous losses pushing it towards the $30,000 region.

At the time of writing, the number one cryptocurrency is in trouble after plunging below the $40,000 mark during today’s early morning trading session. According to a near-term technical perspective, Bitcoin’s current downward trend appears unstoppable. However, the 200 Simple Moving Average on the daily chart could be Bitcoin’s savior going through ongoing circumstances.

Bitcoin Price Analysis: General price overview

Earlier today, Bitcoin registered a new 3.5 month low, following China’s latest decision to ban all transactions involving cryptocurrencies. The latest price dip is the most extensive price breakdown of the current bearish leg. The number one cryptocurrency recorded a low of about $38,500 in today’s early morning trading session, marking a 35 percent price decline from the recent ATH of $64,880. Such a price decline was last seen on the 8th of February.

At present, the 200 Simple Moving Average (SMA) at $31,602.24 appears to be the best support line for the bleeding crypto asset. Defending and safeguarding this critical support remains critical to avoiding another massive bearish price trend. The last time the 200 Simple Moving Average was compromised as a support line was in March 2020, when the top crypto suddenly plummeted to $3,800.

Meanwhile, Bitcoin is exchanging hands at around $40,359 at the time of writing. On looking at the near-term technical indicators, the route currently with the least resistance for Bitcoin appears to be the downside. With the Relative Strength Index (RSI) setting camp at the oversold area, there are no signs of early recovery for Bitcoin. At present, investors should tighten their belts and prepare for a further downward stretch.

Bitcoin price movement in the past 24 hours

Source: TradingView

According to Bitcoin’s price movement in the past 24-hours, it is evident that the number one crypto asset has plunged to level 26 of the Relative Strength Index. This implies that Bitcoin has degenerated into the oversold area of the market. According to RSI analysis, Bitcoin’s current negative price movement is nearing bearish fatigue. Usually, bulls tend to emerge whenever a crypto asset hits deep levels of the oversold RSI areas of the market. Additionally, Bitcoin’s price is also currently below the 20 percent range of the daily stochastic. This means that the crypto is still painting a bearish picture while in the oversold region.

Bitcoin 4-hour chart

Source: TradingView

According to the Moving Average Convergence Divergence (MACD) indicator on the 4-hour chart, Bitcoin’s bearish narrative is accurate, and it is here to stay. The MACD blue line moved below the 0.00 mean line a while back, and it is now exploring the depths of the negative area.

Such a move has not been seen since the March 2020 market crash. It is safe to say that the bearish trend is unstoppable at present unless the 200 Simple Moving Average unfolds as a solid support line. At present, investors should hold back until the crypto coin settles above the $40,000 region to go all-in. A decisive close above $40,000 could initiate Bitcoin’s recovery.

Conclusion

One of Bitcoin’s misfortunes is China’s decision to ban the use of cryptocurrencies in the vast Asian country. Another factor affecting the price of the crypto is the recent decision by Tesla to end their partnership with Bitcoin.  

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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