The king of cryptocurrency, Bitcoin, has slipped below its price support following pivotal developments on EPA environmental issues and other factors.
The price of Bitcoin stands at $38,832.74 at the time of writing.
Now, many bitcoin experts are concerned that the price of Bitcoin could fall further as it struggles to hold the $38,000 price level.
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Profit-taking culprit for Bitcoin slump
More so, profit taking could have some impact on why Bitcoin is pushing to break the $40,000 mark. Support at the $38,000 level could also be held on the buy-the-dip sentiment.
Santiment, a cryptocurrency data feed for investors, has followed an increase in BTC in-profit transactions. The number has risen rapidly over the past two weeks, all of which were classified as selling.
That said, the BTC market price may not recover anytime soon unless traders stop the sale.
Bitcoin has been trading below $40,000 for the past week. The low volumes can be discouraging for crypto traders and investors.
BTC total market cap at $731.71 billion on the daily chart | Source: TradingView.com
In addition, Bitcoin also suffered a massive drop on Sunday but recovered the following day. So in the last 24 hours, the price has gone up and bounced back by 2.7%.
ZebPay analysts said the top currency has fallen to $38,750 with a Fibonacci retracement level of 61.8% and has fallen to $37,386 as a result.
Bitcoin has had multiple supports around $37,300 which has already happened in the past, so it is adapting psychologically and showing the same trend.
RSI shows positive divergence
As the crypto’s relative strength index hits the long-term trendline, BTC was rejected three times. In order for the BTC market price to improve, the trendline must break. BTC has technically formed this bearish wedge pattern, but thankfully, the RSI has shown a positive divergence.
Bitcoin has fallen to over 20% in the past month. Now, moves of this type can trigger flush-outs in the futures market, which also results in massive cuts in open interest rates.
The problem lies in the fact that open interest rates are not falling significantly with the current downtrend. It still remains a bit higher compared to March 2022, when the most sought-after cryptocurrency traded at relatively similar prices.
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So if the price is able to close and is held above the wedge resistance line, it is expected to rise as high as $41k to $41.5k levels.
However, a close or a break below the support will mean Bitcoin slips further and prices could also fall to the $37k – $35k levels.
If the price breaks at these levels, expect immense liquidation and price drops given the high open interest as opposed to market cap.
Now, the $37K level is a critical area to watch out for in the coming days as it could have a major impact on the market trend in the near term.
Featured image from Pixabay, chart from TradingView.com