Bitcoin’s price has taken a hit since the day El Salvador made it legal tender. It has broken many key supports and things don’t seem really good for the cryptocurrency at the moment. In the short term, Bitcoin’s key support at $41k needs to hold. As of now, the coin has seen a price jump and is trading above $43k. But we can see a pullback yet again and if the support doesn’t hold we will move to lower levels like $37k-$39k.
Bitcoin’s price action
On the daily chart, 200 EMA is giving some support to the cryptocurrency. And I hope it holds because we don’t have any significant support below that for BTC. China’s latest crackdown on crypto and another ban news are creating immense sell pressure on the market. And not just for Bitcoin every other token is taking a serious hit much more than BTC. Even DeFi tokens that hold up well are struggling and the price action is bearish. Yes, we have seen a good jump yesterday night but it will be important to see if the price continues to rise as the day closes.
The price of Bitcoin is moving in a downward channel which is considered to be a bullish pattern. This is because we often see a breakout in the upward direction in such a pattern. In the above chart, you can also clearly see that the price of Bitcoin saw a good jump from $40,900 which is critical support as I said. For now, it is important for this to hold and the price to slowly move up claiming important supports back again.
An opportunity could be at play
The problem in the downward channel pattern is that the price could move to even lower levels. Even though $40k-$41k is very strong support, many analysts are predicting a rebound from $37k. I think it’s best to be prepared and wait for the market to react. If it goes up, well and good and if not then you have a very good DCA opportunity at hand.
What are your thoughts on Bitcoin’s key short term support? And do you think it will hold and BTC won’t go back below $41k? Let us know in the comments below. Also, if you found our content informative do like and share it with your friends.