Bitcoin is currently trading above $40k as fear returns to the market due to continuous selloff continuing for the third consecutive day. We observed that the Fear and Greed Index is at 30 as at the time of writing – an indication of the prevalent bearish sentiment.
A surge that took BTC as high as $46k was perceived to mark the end of the bearish dominance. Unfortunately, recent price actions suggest that the plot might have been a bull trap as the top coin is trading a little above $40k.
Market fundamentals have been fairly flat as there have been no huge announcements that could affect prices. Recent news about Ukraine legalizing bitcoin was expected to be a huge boost to the bullish. Reverse was the case as the market shed a larger amount of its accumulated gains after the report.
It remains a mystery as to the cause of the current market trajectory. However, a closer look at the chart reveals some hints. One analysis noted that the apex coin is sure to see a bearish convergence on MACD (daily chart) within this week.
An interception is underway as at the time of writing. Additionally, the histogram associated with the Moving Average Convergence Divergence is also printing a gradual downtrend in the demand.
Aside from the readings on the daily chart, we observed that last month’s price actions have resulted in a bearish divergence on the monthly. This could spell trouble for BTC as it may experience more downtrends.
Critical Levels to Watch
Support 1: $39,000
Support 2: $36,000
While bitcoin remains above $40k, we note that the price level has been flipped more than twice over the last 24 hours. However, it is important for the bulls to hold BTC above $39k as previous price movement indicates that a flip of the said mark may result in a retest of the $36k support.
Demand will have to be concentrated at $36,000 as we may see a test at $32k if the barrier fails.
