Bitcoin bulls have faded away in the high sell pressure since BTC fell from $47.3k. It hasn’t sustained and bounced back from any significant support. On the daily chart, the most prominent red candle formed yesterday with more than a 6% correction as Bitcoin crashes below $40k again. On-chain metrics suggest that the main reason behind this was miner outflows that created enormous sell pressure.
Bitcoin crashes below $40k again: The details
Analysts are saying that the crash from $42k to sub $40k level has been due to the miners creating sell pressure. The on-chain indicator called miner outflow showed a spike yesterday during the time of the crash. Even in the past, when there has been a spike in miner outflow, the price has corrected very soon. It shows that the current market sentiment is bearish, and prices could move further below.
Now, it’s difficult to say why the miners are dumping their Bitcoins at this rate. Earlier you could see that the spikes were mostly at the tops, but lately, that’s not the case. Is it whether they are bearish about Bitcoin’s price action in the short term? Or are they just planning to buy back at a lower rate? Whatever the case is, it’s bearish for Bitcoin.
Bitcoin price action
On drawing a fib retracement from a swing high of $43,448 to a swing low of $39,173, we can see there is going to be resistance at the 23.6% level at $40.1k. If Bitcoin is able to break through that level, we could move towards the 38.2% and 50% levels between $40.8k-$41.5k. The sharp trendline on the 1-hour chart seems to have broken already, but it will be important for us to have one more 1-hr candle to confirm the same.
On the upside, there is going to be a strong resistance between the $42k-$44k level, and it will not be easy for BTC to clear the same. And on the downside, BTC needs to hold above $39k to be able to restest $40k soon. The price has given support to Bitcoin multiple times after the correction from $69k, and if it breaks, we could go to $37k or even lower.
What are your thoughts as Bitcoin crashes below $40k again? And do you think it was necessary to build momentum and cross the $48.2k level? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Coinbase is making a movie trilogy with BAYC NFT characters.
