BTC is approaching critical support, a breakdown could lead to $37,000
BTC is currently retesting a key support area that has held the price for the past few weeks. The next few days or even hours will likely dictate the direction of BTC in the short term.
While a bullish reversal is possible if this level holds, there is still a possibility of a bearish breakdown leading to liquidation of long positions.
Technical Analysis
Bitcoin has been in a strong downtrend since its all-time high of $69,000 formed on November 10, 2021. However, it has yet to make a lower low in the long-term time frame. This shows that BTC is still trending an uptrend.
The area highlighted in gray is a key area of ​​support based on previous price action. The price has retested this zone and created a long wick underneath it, showing that the bulls are actively buying whenever the price dips to the $40,000 area.
Furthermore, this support area fully coincides with the last key Fib retracement level of 0.786. High volatility assets like bitcoin tend to experience deep retracements; As such, it’s a pretty good standard for BTC to end the correction.
All of these signs confirm that the $37,000-$40,000 area is acting as a critical support and if BTC price breaks below this zone, BTC will form a lower bottom and end the short to medium term bull run.
BTC/USDT daily chart | Source: TradingView
Short term analysis
On the 4 hour time frame, we can see the price correcting and possibly forming a bullish flag pattern after bouncing off the $40,000 support area.
What is interesting is that the volume decreases when the price falls. This is a bullish signal showing that the downside momentum is fading.
We should closely monitor the price reaction to the current support area and pattern support line to determine the direction of the short-term trend.
Assuming BTC loses both of these potential support levels, a retest of the $37,000 area seems likely as a large amount of longs could trigger a stop loss if the $40,000 area is lost.
BTC/USDT 4 hour chart | Source: TradingView
Onchain analysis
In December 2020, most bitcoin miners sold a significant portion of their coins. They changed their strategy after the price fell below $42,000 in January 2021.
Since then, miners have started HODL. As a result, miners’ reserve balances hit a six-month high.
Daily BTC/USDT chart and miner balances | Source: TradingView
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
Join CoinCu Telegram to keep track of news:Â https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
Author
Market
BTC is approaching critical support, a breakdown could lead to $37,000
BTC is currently retesting a key support area that has held the price for the past few weeks. The next few days or even hours will likely dictate the direction of BTC in the short term.
While a bullish reversal is possible if this level holds, there is still a possibility of a bearish breakdown leading to liquidation of long positions.
Technical Analysis
Bitcoin has been in a strong downtrend since its all-time high of $69,000 formed on November 10, 2021. However, it has yet to make a lower low in the long-term time frame. This shows that BTC is still trending an uptrend.
The area highlighted in gray is a key area of ​​support based on previous price action. The price has retested this zone and created a long wick underneath it, showing that the bulls are actively buying whenever the price dips to the $40,000 area.
Furthermore, this support area fully coincides with the last key Fib retracement level of 0.786. High volatility assets like bitcoin tend to experience deep retracements; As such, it’s a pretty good standard for BTC to end the correction.
All of these signs confirm that the $37,000-$40,000 area is acting as a critical support and if BTC price breaks below this zone, BTC will form a lower bottom and end the short to medium term bull run.
BTC/USDT daily chart | Source: TradingView
Short term analysis
On the 4 hour time frame, we can see the price correcting and possibly forming a bullish flag pattern after bouncing off the $40,000 support area.
What is interesting is that the volume decreases when the price falls. This is a bullish signal showing that the downside momentum is fading.
We should closely monitor the price reaction to the current support area and pattern support line to determine the direction of the short-term trend.
Assuming BTC loses both of these potential support levels, a retest of the $37,000 area seems likely as a large amount of longs could trigger a stop loss if the $40,000 area is lost.
BTC/USDT 4 hour chart | Source: TradingView
Onchain analysis
In December 2020, most bitcoin miners sold a significant portion of their coins. They changed their strategy after the price fell below $42,000 in January 2021.
Since then, miners have started HODL. As a result, miners’ reserve balances hit a six-month high.
Daily BTC/USDT chart and miner balances | Source: TradingView
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
Join CoinCu Telegram to keep track of news:Â https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
Other Posts
Related Posts
Latest
BlockDAG X1 App Receives Huge Response From Community, Hiting Over 200K Users! Latest on Bitcoin & Chainlink Prices
Press Release
BlockDAG X1 App Receives Huge Response From Community, Hiting Over 200K Users! Latest on Bitcoin & Chainlink Prices
