Following a three-day period of lighter trade, Bitcoin and other major altcoins showed a major decline on Monday. Bitcoin is being driven by exogenous factors. Strong selling pressure in the BTC perp market despite robust fundamentals.
Why Bitcoin Price Plunged Below $40k?
With the start of the week, Bitcoin saw a sharp selloff during early Asian hours. The flagship currency lost 4% of its value and fell to an intra-day low of $38,905. The reason behind the sudden plunge might be the long liquidation.
More than $100 million worth of longs were liquidated over a one-hour time frame as Bitcoin BTC/USD lost support at $39,000.Data from CoinGlass shows that there was $110 million worth of positions liquidated over a one-hour period.
The majority of liquidated traders were in long positions. In the last one hour, $107 million longs were liquidated while just $3.91 million shorts were liquidated. Bitcoin saw $31.81 million worth of liquidations while Ethereum came a close second with $31.41 million worth of liquidations.
What Next For BTC Price?
Bitcoin price traded below the $41,200 resistance zone for several days. BTC/USDT started a fresh decline, moved below the $40K pivot, and broke the $39,500 support level.
BTC Price is currently moving lower and trading at $38,900. If the bears remain in action, the price could drop to $37,000. The key weekly support is near USD 37,200, below which the price might gain bearish momentum.
Immediate resistance on the upside is near the USD 39,500 level. The main weekly resistance is now forming near the $40,200 level, above which the price could accelerate higher.
As of this writing, the coin is also trading below its pivot point and closer to its initial pivot support. Furthermore, the largest cryptocurrency is trading below its Displaced Moving Average (DMA), adding to the negative sentiment surrounding it.
Bitcoin at Crossroads?
Bitcoin (BTC) is approaching a critical moment, according to crypto researcher Benjamin Cowen, where the flagship cryptocurrency must ultimately choose a course.
Cowen tells his 725,000 YouTube subscribers in a new strategy session that Bitcoin is making greater lows in a pattern that parallels past eras in the cryptocurrency’s history.
The other times that Bitcoin printed its current market structure, according to the expert, were in 2013 when it surged and in 2018 when it plummeted into a bear market.
With Bitcoin creating a pattern that has historically resulted in dramatic trend reversals, Cowen examines what may lie ahead for the world’s most valuable cryptocurrency. According to the expert, BTC has to retake its 200-day simple moving average (SMA), which is now at $49,000, in order to reestablish bullishness and lower the risk of a bear market.
According to an analyst :
What happens if we do put in a lower low? What happens if we do come down and we go down to like the low $30,000 and then we bounce? One thing to consider is that even if we put in a lower low, there’s still a good chance we’ll come right back up to $40,000 or maybe $42,000 to $43,000. There still is a decent chance that that could happen.”