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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