After a pivotal development in the EPA environment issues, Bitcoin has fallen below its support price.
As of writing, the Bitcoin price was at $38,832.74.
Now, many bitcoin experts are worried that Bitcoin’s price could plummet further as it struggles to hold onto the $38,000 price level.
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Profit-taking Culprit for Bitcoin Slump
Profit-taking could be a reason why Bitcoin struggles to surpass the $40,000 threshold. The buy-the dip sentiment could be triggering support at $38,000.
Santiment is a cryptocurrency data feed that investors can use to track an increase in BTC-in-profit transactions. The number of transactions has increased rapidly over the past 2 weeks. All were classified as selling.
However, the BTC price will not recover quickly unless sellers stop selling.
Bitcoin traded below $40,000 for the last week. Investors and crypto traders can find it difficult to deal with low volume.
Source: TradingView.com| Source: TradingView.com
Bitcoin also experienced a huge drop on Sunday, but has since recovered. In the 24 hours since Sunday, Bitcoin’s price has been climbing and rebounding by 2.7%.
Analysts at ZebPay stated that the highest currency fell to $38,750, with a 61.8% Fibonacci retracement level. The result was a drop of $37,386.
Bitcoin has had multiple supports at around $37,300 which already happened in the past, so it’s psychologically adapting and displaying the same trend.
Positive Divergence in RSI
As the crypto’s relative strength index hits the long-term trendline, BTC was rejected three times. To increase BTC’s market price, it is necessary to break the trendline. Technically, BTC is in a falling wedge pattern. However, the RSI shows positive divergence.
Bitcoin’s value has fallen to 20% in the last month. This type of movement can also trigger flush-outs at the futures market, which could lead to huge reductions in open interests.
Problem is that the open interest has not fallen significantly despite the current downtrend. This is still quite a difference from March 2022, when most desired crypto traded at similar prices.
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The price can close if it is above the wedge resistance line. If so, an increase in the range of $41k-41.5k may be possible.
However, a close or a break happening below the support will be tantamount to Bitcoin further slipping and the prices can also go down to $37k – $35k levels.
You can expect massive liquidation and price falls if the price breaks below these levels due to high open interest relative to the market capital.
In the immediate future, $37K is the critical level to be on your guard as it has the potential of causing a major market shift in short-term.
Featured Image from Pixabay. Chart by TradingView.com
