After a pullback from the 50-day and 100-day moving averages, Bitcoin’s price is still stagnating at around $40,000. The cryptocurrency broke the levels, going below them a few weeks ago, these levels now operate as the flagship coin’s resistance.
Skepticism Over BTC’s Price Action May Lead to Panic Selling
According to On-Chain Data’s tweet, $BTC remains in the bottom range of an upward channel, trading below significant EMAs (20, 55, 100) and the point of control. “These are not so good-looking signs,” On-Chain added.
The Supply in Profit indicator is one of the key crypto performance indicators. It shows the percentage of the total BTC supply that is currently profitable.
Supply in Profit has been above 62.5 percent since April 2020, according to long-term statistics as revealed by Glass node. If the 62.5 percent threshold is breached in the coming weeks, the BTC market is likely to capitulate.
Due to the “deteriorating macroeconomic climate,” Christopher Yates, editor at AcheronInsights, believes Bicoins price could drop further 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 stated in his latest BTC analysis.
What Triggered the Drawdown Below $40K?
Due to its vulnerability to macroeconomic issues like inflation and financial regulation, BTC behaves more like equities/stocks. As a result, the token’s potential as a digital safe investment haven has been jeopardized.
Losses in stock indexes trickled into BTC. This year, the token has performed quite similarly to U.S. tech equities. According to Bloomberg analysis, the correlation between BTC and U.S. tech equities also set a new high in April.
In its most recent weekly analysis, data resource Econometrics demonstrated the demand difference between small and wealthy Bitcoin investors. It observed, for example, that addresses holding up to 10 BTC have been amassing the currency over the last 30 days. Those with more than 10BTC, have started selling. As a result, tiny investors have been absorbing sell-side pressure, keeping Bitcoin from falling below $30,000.
Woo also mentioned that Bitcoin whales have been selling off their holdings, keeping the market under pressure.
At the time of publication, BTC is trading at $ 38943.00, up 2.14in a day. As a result, if sellers keep the coin price below $40000, the selling momentum will pick up, tempting a return to $36400 support and a January low of $33000.
With Bitcoin’s steep decline since then, the prediction game has become much more difficult. The most fervent crypto doubters anticipate that Bitcoin will take a nosedive to $10,000 in 2022, but some analysts still hold that the coin will hit $100,000.
