Bitcoin Price Analysis: After Rejecting at $40K, BTC Could Drop to $36K and Below

By | April 30, 2022

Bitcoin has slowly declined over the past few days. The price got rejected at the 100-day moving average line twice last week, and now the 100-day and 50-day moving average lines turned into heavy resistance levels.

In addition, the $40k level is also acting as a significant static resistance level, and the price has been trading below it for most of the time over the past week.

Technical Analysis

Technical Analysis By: Edris

The Daily Chart

The recent trajectory of lower highs and lows has been forming on the chart, indicating a continuation of the bearish trend. As it seems now, BTC’s price targets the $36K support area in the short term, which has held the price on multiple occasions over the past year. However, a break below it could result in a rapid drop towards the $30K demand zone.

The 4-Hour Chart

On the 4-hour timeframe, it is evident that the price is getting closer to the lower boundary of the marked bearish flag after getting rejected from the $40K zone.

However, the price action forms a falling wedge pattern, which is considered a bullish reversal pattern. For a reversal to take place, the price needs to break above the higher trendline of the wedge. In that case, we can expect BTC to retest the $43K level and even higher.

Furthermore, the three touches at the lower trendline of the falling wedge signal a clear bullish divergence with the RSI, which adds to the probability of a bullish rebound in the short term. On the other hand, the bearish scenario in the mid-term is still probable, and if the falling wedge pattern fails, the sell-off would be accelerated, and the price could drop to $36K, as mentioned above.

Onchain Analysis

Onchain Analysis By Shayan

The MVRV is the ratio of a coin’s Market Cap to its Realized Cap, which indicates whether the price is overvalued or not. This may be the most informative on-chain indicator to map the present market situation.

Values over 3.7 have historically suggested market tops, while values below 1 suggested market bottoms. The MVRV is at 1.5739, and the market’s momentum is not encouraging.

As a result, the probability of having an MVRV of 1 or below in the mid-term is significant. Unless a macro catalyst drives demand and price begins to gain traction, even if it is only a short-term rebound, such as in early 2018.


Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.

Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.

Source link