Market

This is the level to watch if BTC falls below $35,000

The market has witnessed a massive sell-off over the past few days, triggering a sudden BTC crash below $40,000. Onchain data shows a period of absolute “capitulation” in the market.

Long-term analysis: daily chart

BTC lost the critical $37,000 – $40,000 support range.

As shown in the chart below, both the 50 and 100-day ma crossed the 200-day ma before the price fell below $40,000, indicating an imminent sell-off.

Current supports are at $35,000, lower at $30,000 (May-July 2021 low). On the other hand, if the price pulls back from any of the mentioned support zones, the former support ($40,000) has turned into a stiff resistance. The daily RSI is also showing oversold conditions, currently at 20, suggesting a bullish pullback is possible in the short-term.

BTC/USDT daily chart | Source: TradingView

Short term analysis: 4 hour chart

Judging by last week’s price action on the 4-hour timeframe, it is clear that the price is in a strong downtrend and has been rejected by the 100-MA multiple times.

Also this time, when the price crashed from $48,000 to $40,000, went through a consolidation phase and was further rejected by the 100MA, this rejection triggered the next drop.

With an increase in trading volume and a pin bar candle in the $35,000 support area, we can expect another period of consolidation before the market decides its next direction.

BTC/USDT 4 hour chart | Source: TradingView

Analysis

The Spent Output Profit Ratio (SOPR) is an on-chain indicator used to measure the overall market profit and loss for each trade and is often used to determine the “abandonment” phase of the market.

Long-term holders sold or moved their coins before btc hit ATH at $69,000 in November, while short-term holders panic-sold in the last bloody days. As you can see, the STH_SOPR index has fallen to 0.95, which is the perfect explanation for the Surrender event.

Source: CryptoQuant

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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.