While the broader market struggles with its decline, Bitcoin dips below the $40k mark for the second time in a week.
This latest dip comes after a period of relatively stable prices for Bitcoin; which had been hovering around the $40,000 mark for several weeks.
However, it now appears that the market is losing confidence in the coin.
Bitcoin and most of the other cryptocurrencies have been declining for a few days; and the bearish trend may continue in the days ahead.
In the past 24 hours, the overall market dips by more than 4%.
The cryptocurrency market cap has dropped to $1.8 trillion, down from its recent high of $2.2 trillion.
If the bearish trend continues; the overall crypto market capitalization could reach as low as $1.7 trillion before the end of the week
As of this writing, Bitcoin dips by more than 3% in value and is trading at around $38,900 per coin.
BTC is currently priced at about $38,900 per unit. In the previous seven days, bitcoin has lost more than 8%.
Bitcoin’s latest bearish trend pushes the cryptocurrency even lower than its all-time high of $69,044, which was set in November 2021.
The bulls would have to defend the $35k support level for Bitcoin to recover its value of around $45k in the short term; after slipping below the $40k psychological barrier.
Critical levels to note
The BTC/USD 4-hour chart is bearish at the moment, with the bears in control of the market. According to technical indicators, Bitcoin is underperforming and may soon fall further.
The Relative Strength Index (RSI) is currently at 42.51 and is moving towards the oversold region.
The MACD has just crossed below the signal line in the bearish zone, which indicates that selling pressure is on the rise.
The MACD line is far below the neutral zone, suggesting that the bearish momentum is currently in force.
The 30-day RSI indicates that Bitcoin is presently in the oversold state; and may face additional selling pressure in the near term.
The 200-day moving average (MA) is currently at $37,859 and is trending downwards. This indicates that the bears are in charge of the market.
The support levels to watch out for are $36,800 and $35,000. The resistance levels to watch out for are $40,000 and $42,000.
Over the next few hours, Bitcoin may drop further than the first key support level at $37,527 if the bearish trend continues.
BTC might be forced to defend the important support level of $35,000 in the event of a lengthy bearish run.
Alternatively, if Bitcoin can recover some of its recent losses and move back above the $40,000 level, it could start to attract fresh buyers.
The sell-off in Bitcoin could be the result of the expiration of more than $6 billion worth of BTC futures contracts on February 28.
It is also possible that the recent Bitcoin correction was caused by whales selling their BTC holdings.
It seems like Bitcoin just can’t catch a break as it dips below the $40,000 mark yet again.
After reaching an all-time high of nearly $70,000 in November, Bitcoin has been on a steady decline, losing over 8% in value.
If Bitcoin slides below $35k, it could quickly drop to $30k.
On the other hand, a move above $40k would invalidate the bearish pattern and take BTC back to $45k.
Will Bitcoin survive this present bearish trend? Only time can tell.