BTC Price Analysis: Bitcoin Dips Below $40K For the First Time in a Month, What’s Next?

The 200-day moving average has significantly hindered the recent bullish surge, resulting in a substantial price decline. Bears are currently in control of the market, and the price is plummeting with a strong momentum, which resulted in a break below the 50-day and 100-day moving averages.

Technical Analysis

The Daily Chart:

Technical Analysis By Shayan

The $37K and $34K demand zones are the next levels of support for Bitcoin. If the price is supported by the short-term substantial support level at $37K, it could resume its rally toward the significant resistance at $45K. Failing to hold the price at this level might mean that Bitcoin’s next stop is the $33K key demand zone.

Source: TradingView

The 4-Hour Chart:

This chart shows that Bitcoin has formed a bearish continuation correction flag pattern in the 4-hour timeframe. After reaching the upper trendline for the third time, it was rejected and initiated a solid bearish rally. This is undoubtedly a bad sign for the price in the medium term, and a vast bearish move is likely if Bitcoin succeeds in breaking below the lower trendline.

Presently, BTC is fluctuating in three bands. The first is the $37K-$42K range, which the pricing has already entered and is likely to remain in for some time. The $34K-$37K range is the second, while the $42K-$45K range is the third. Based on the present market situation and prevailing fear, Bitcoin is expected to continue and consolidate in these three price bands in the medium term.

Source: TradingView

Sentiment Analysis

Sentiment Analysis By: Edris

Funding Rates

Funding rates are among the most popular indicators for analyzing the Perpetual Futures Market sentiment. For the past couple of weeks, this metric has been showing positive values as the bears were being liquidated during the rally to $48K.

These positive values indicated bullish sentiment among the futures traders and the bulls’ dominance over the market. However, following the recent drop in price, the funding rates have shown negative values again after a while. The aggressive bulls are liquidated, and the bears returned to the market. This negative sentiment could start the second round of capitulation in the futures market. It could lead to the price making lower lows, especially if the spot market cannot cope with the selling pressure from the derivatives market.

Source: CryptoQuant