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: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.

Recent Posts

Best Cryptos to Invest in December 2024: Qubetics Surges Past $2.6M as Solana Records Big Whale Pump and Polkadot Aims for $6

Best Cryptos to Invest in December 2024: Qubetics surges past $2.6M, Solana’s whale pump ignites…

22 minutes ago

Bitcoin Trader Turned $100M in His 20s—Now Reveals 5 Altcoins to Build a $50M Portfolio, With Memecoins Leading the Way!

As Bitcoin reaches unprecedented heights and the market surges, he's highlighting five altcoins poised for…

2 hours ago

Which Crypto Will Explode in the 2024-2025 Bull Run?

With the crypto market reaching new peaks, many are eager to discover digital currencies poised…

2 hours ago

Dogecoin and Shiba Inu Approach $1, but All Eyes Are on XYZVerse’s Push to $10!

XYZVerse, blending sports passion with meme energy, is set to make a significant impact, uniting…

2 hours ago

Will Bitcoin Crash or Soar Past $105K in 2024?

Will Bitcoin Crash?" seems to be one of the most controversial questions, as the price…

3 hours ago

The Best Crypto for Passive Income? 10% Weekly Gains and 20% Final Surge—Qubetics Mirrors Cosmos’ Early Success!

There’s always that one coin people wish they hadn’t overlooked. For many, Cosmos ($ATOM) is…

4 hours ago

This website uses cookies.