Bitcoin Below Key Support Level; And then?
Bitcoin, the flagship cryptocurrency, has been hovering below $40,000 for the past few days. The broader market correction has pushed altcoins to trade below their key support levels. Ethereum price was below $3000 as the coin was rejected from the price level mentioned above.
Hard resistance for Bitcoin stands at $40,000 as traders continue to exit the market over the past week. In the last 24 hours, BTC had fallen by 3% and last week the coin had seen a 6% depreciation. The crypto market continues in an accumulation phase.
Increased accumulation is often related to bullish pressure in the market, however, the market paints a different picture. Higher accumulation is also related to higher risk/ratio, which is basically a bullish indicator for the coin.
Table of Contents:
- Other measures to reinforce the fact that Bitcoin could take a bullish price direction
- Bitcoin price analysis: four-hour chart
- Technical analysis
Other measures to reinforce the fact that Bitcoin could take a bullish price direction
Kaiko data shows that trading volumes have declined for BTC and ETH. The image below illustrates the decline in trading volumes seen across major centralized exchanges, showing how BTC and ETH are at their lowest trading volumes since the August 2020 bear market.
Essentially, however, this could mean that people could hold onto their assets as the accumulation phase suggests and prices should rise.
Bitcoin and Ethereum trading volumes are at their lowest since August 2020. Image source: Kaiko
Currently, Bitcoin’s short-term price action remains bearish amid broader market weakness.
Bitcoin price analysis: four-hour chart
Bitcoin is trading near $39,000 on the four-hour chart. Image Source: BTC/USD on TradingView
Bitcoin was trading at $38,202 at the time of writing. It has dipped below its support level of $39.806 in the past few trading sessions.
BTC has been battling the $40,000 mark for over a week now. The buyers left the market, which is why the coin continues to struggle between $40,000 and $38,000 respectively.
Should prices reverse, BTC could trade near $40,000 and a slight boost could help BTC reach the $42,000 mark; however, this level could act as a strong resistance for BTC. A drop in the current price will take the coin to $37,702.
Bitcoin saw a drop 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 building. Sellers were fueling short-term price momentum.
Just 48 hours ago, buyers had returned to the market, it all boils down to BTC trying to bounce off its charts. The coin briefly moved above the 20-SMA line just 24 hours ago until BTC started trading against $38,000.
In the relative strength index, buyers briefly exited the market again and could reappear if demand pushes the coin above the 20-SMA.
Bitcoin featured a green histogram briefly indicating an uptrend on the four-hour chart. Image Source: BTC/USD on TradingView
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