Bitcoin has fallen by 12% over the past day, and over the past 7 days, the fall has been 33%. The price has already dropped below $40,000. The altcoin market is falling, even more, this time, so the dominance of Bitcoin began to increase slightly.
Let’s take a look at what this drop will lead to and what to expect from the market in the coming days:
The chart failed to hold around $45,000 and dipped towards the major support at $40,000. At the moment, buyers are holding the price in the $39,000 – $40,000 range. This is a key support level for the Bitcoin chart.
It is in this area that the 200-day moving average line comes, which is also a strong support. In addition, all indicators are now very oversold. Stochastic fell to level a year ago when Bitcoin crashed at 70% for one day. The RSI has broken the lower boundary, which is rare on the daily timeframe of the Bitcoin chart. MACD also continues to widen the fall and gap between the moving averages lines.
All of this reflects the real panic in the markets. This can be seen in numerous crypto trading chats, where participants were rushing to sell their positions.
An interesting fact is that the volume of liquidations this fall was just over $1 billion. It turns out that in the last 3 major collapses, the volume of liquidations has been systematically decreasing. This indicates that “weak hands” are being knocked out of the market. Ultimately, such situations lead to growth.
Let’s take a look at the 4-hour timeframe:
Here you can see that the price has been steadily decreasing during the last 10 days. But at the same time, the RSI indicator continues to rise during the same period. Thus, a triple bullish divergence has formed on the chart, which is a strong signal. This indicates an upward reversal of the chart. AI Price Predictions may confirm our assumption.
Considering all these factors, we can say that Bitcoin should soon change its downtrend to an uptrend. It may take time for a reversal, but many factors are now pointing to just that.