“Paper hands” brought Bitcoin price back below $40,000, while technical analysts believe BTC will remain within that range until the $42,000 level is breached.
The cryptocurrency market is in the midst of another dull day as the price of Bitcoin (BTC) dipped below $40,000 which was just attained after a previous dip. This change happened ahead of the Federal Open Market Committee (FOMC) meeting where officials intend to sit and talk about whether the interest rates should be raised or kept near zero.
Although many anticipate that Bitcoin will rise and take a bull run above $40,000, but technical analysts are sounding a note of warning about a looming dip that could send Bitcoin price to $30,000 and below.
Cointelegraph Markets Pro and TradingView data obtained showed that after losing the $40,000 support level, Bitcoin bulls were overrun by sellers, triggering a drop to today’s price which was low at $38,415.
With the threat of a death cross and significant headwinds residing in the $40,000 to $42,000 resistance cluster, recent data from Glassnode suggests that the newest set of Bitcoin hodlers are not showing signs of selling at the current levels, especially for wallets that have been holding for longer than 3 months.
The managing partner and chief investment officer at ExoAlpha, David Lifchitz, stated that the price action for Bitcoin has been stuck in a range between $33,000 and $40,000 for more than three weeks as the market is trying to stabilize after the May 19 sell-off.
The crash managed to remove speculators who were the ones that tended to move the price in a fast-forward way leading to a decline in momentum for Bitcoin which is now “stuck in limbo” with “a fierce battle brewing under the surface between bulls and bears” and has led to a relatively higher average traded volume after the crash
Lifchitz also indicated that the bulls comprised of dip buyers and institutional investors such as Micro Strategy which take advantage of the dip to reinforce their holdings, while the bears are seen to be miners who are looking to unload at the best price they can get now in order not to crash the market more and thus unknowingly shot themselves in the foot.
furthermore, a technical perspective to this according to Lifchitz highlighted the $42,000 level as a significant hurdle for the price of Bitcoin which would likely need miners to exhaust their selling or be convinced that they could unload at a higher price if they let Bitcoin breathe a little bit in order to thrive.”
A bull run above $42,000 would be needed for Bitcoin in order to extract itself from its trading range, at which point it could power quickly higher to the $50,000 level which is in line with the local bottoms of April 26 and May 12 before beginning to dip on May 15.”
Most if not all altcoins faced pressure as Bitcoin price fell below $40,000, but few tokens managed to overcome the bearish trend.
The best performing token for the day is Amp, which gained 44% to establish an all time high (ATH) at $0.1211. Shiba Inu (SHIB) and Chiliz (CHZ) followed closely at 18% and 20% respectively after the news that Coinbase Pro would list both assets.
The overall cryptocurrency market cap now stands at $1.6 trillion and Bitcoin’s dominance rate is 45.3%.