Bitcoin, the top cryptocurrency, fell below the critical price support over the weekend, due to several adverse developments. At the time of press today, Bitcoin price was $38,832.74, according to CoinMarketCap data.
Experts now fear that the top cryptocurrency’s price may fall further if it fails to hold the $38,000 price level. Also, profit-booking by traders may be the reason why Bitcoin is struggling to go above $40,000 level.
“Over the weekend, Bitcoin’s recovery was put on hold. Rejection from levels near $40,000 could be attributed to profit-taking. Simultaneously, support at $38,000 could be holding due to the increase in the buy-the-dip sentiment,” Darshan Bathija, CEO and Co-Founder of Vauld, told FE Online.
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Santiment’s daily on-chain transaction volume in profit metric tracks the number of transactions made in profit on the BTC blockchain. Bathija said this count has increased significantly over the last two weeks, implying most of the in-profit transactions are highly geared toward selling. Hence, Bitcoin’s price recovery may not be sustainable until traders stop selling.
“If Bitcoin’s price loses ground below $38,000, subsequent support areas including $36,000 and $33,000, will come in handy,” said Bathija.
Over the past week, Bitcoin has been trading below the psychological level of $40,000 with low volumes. The top crypto witnessed a fall on Saturday and recovered on Sunday. In the last 24 hours, Bitcoin price has increased by 2.69%.
Analysts at ZebPay said in a note that Bitcoin slipped below $38,750 (61.8% Fibonacci Retracement Level) and dropped to $37,386.
“The asset has taken multiple support around $37,300 in the past and this time too, it did exactly the same,” they said.
Technically, on a daily chart, BTC is forming a falling wedge pattern. However, the RSI has formed a positive divergence, according to ZebPay’s note.
“If the price closes and sustains above the resistance line of the wedge we can expect it to surge up to $41k to $41.5k levels whereas a break or close below the support will lead to further downfall and the prices can slide to $37k – $35k levels,” the analysts said.