Bitcoin’s price is currently hovering around $40,000, despite falling from the 50-day and 100-day moving averages. A few weeks ago, the cryptocurrency shattered the levels, falling below them; these levels now serve as resistance for the flagship asset.
Panic selling might result from skepticism about BTC’s price action.
According to On-Chain Data, $BTC stays in the bottom range of an upward channel, trading below important EMAs (20, 55, 100) and the point of control. “These aren’t exactly attractive signage,” On-Chain added.
One of the most important crypto performance indicators is the Supply in Profit indicator. It displays the current profit margin as a proportion of the total BTC supply.
According to long-term statistics published by Glass node, supply in profit has been over 62.5 percent since April 2020. Therefore, the BTC market is anticipated to succumb if the 62.5 percent benchmark is surpassed in the coming weeks.
Because of the “deteriorating socioeconomic situation,” Christopher Yates, editor of AcheronInsights, believes the price of Bitcoins might fall to $30,000.
“The reality that we are about to witness a capitulation surge in volume that has transpired at all the recent BTC price lows in late 2019, early 2020, and mid-2021 makes me highly skeptical that the low is not yet in for 2022,” Yates said in his most recent BTC analysis.
What Caused the Drawdown to Under $40K?
BTC acts more like equities/stocks due to its sensitivity to macroeconomic factors like inflation and financial regulation. As a result, the token’s potential as a digital haven for investments has been harmed.
Stock market losses filtered into BTC. This year, the token’s performance has compared to that of U.S. tech stocks. According to Bloomberg data, the connection between BTC and U.S. tech shares also reached a fresh high in April.
Econometrics, a data resource, recently published weekly research that showed the demand gap between small and rich Bitcoin investors. It discovered, for example, that addresses with up to 10 BTC have been accumulating the money in the previous 30 days. Those who have moreover 10BTC have begun to sell. As a result, small investors have been absorbing sell-side pressure, preventing Bitcoin from going below $30,000 for the first time.
Woo also said that Bitcoin whales have been liquidating their holdings, putting downward pressure on the price.
BTC is now trading at $ 38943.00, up 2.14 in the last 24 hours. As a result, if sellers retain the currency below $40000, selling momentum will ramp up, inviting a return to support around $36400 and a January low of $33000.
Since then, Bitcoin’s precipitous decrease has made the prediction game much more challenging. The most ardent cryptocurrency skeptics predict that Bitcoin will plummet below $10,000 in 2022, yet other analysts still believe the coin could reach $100,000.