Bitcoin (BTC) price dropped nearly 40% as the price dropped to the $40000 support. The coin is under the influence of a descending channel pattern, which led to this correction. Furthermore, the technical chart suggests that the 50 and 200 DMAs could soon create a death crossover, demonstrating bearish sentiment among market participants.
Main technical points:
- BTC Price Hints at 50- and 200-Day DMA Death Cross
- The daily MACD shows that its lines are on the verge of sliding below the neutral zone.
- BTC intraday trading volume is $1.21 Billion, indicating a decrease of 9,275.
The source- BTC/USD chart by Tradingview
As mentioned in our previous section on Bitcoin Price analysis, coin price resonates in a descending channel pattern of the daily timeframe chart. This pattern started back in November 2021 and is still extending the correction phase.
This downward rally has produced a fresh new low at the psychological $40000 level. Price has identified strong support from this level, showing signs of a reversal in price action.
Following the key EMAs (20, 50, 100 and 200), BTC price trades above the defining trend of the 100 and 200 EMAs, indicating a downtrend. Furthermore, the technical chart shows that the 50 and 200 DMAs are on the verge of a death crossover, attracting even more sellers in the market.
However, the Daily-Stochastic RSI shows a bullish crossover of the K and D lines in the overbought zone, supporting price action reversal.
BTC price chart shows a rounded bottom pattern
The source- Tradingview
BTC price is currently trading at $43721, showing a 7.8% pump from the bottom support. This small price reversal has formed a rounded bottom on the 4-hour timeframe. The price has broken past the $43537 neckline and crypto traders can seize the long-term opportunity if the price sustains this level.
The declining average directional movement index line (34) signals that the bearish momentum is waning.
The MACD indicator shows a signal and the MACD line may soon break above the neutral line, providing further confirmation of the bullish pattern.
- Resistance levels- $45837 and $48000
- Support level- $43523 and $40000