Bitcoin Price Correction: Will BTC Fall Below $40,000?
After the Federal Reserve’s announcement of three intended rate cuts in 2024, Bitcoin price surged above $43,000. However, a correction followed as the resistance at $44,000 remained strong. Altcoins also experienced losses.
At the moment, Bitcoin is struggling to maintain its position above $41,000. If this support level fails, BTC could potentially drop below $40,000 and test support at $37,500.
Bitcoin Price Prediction: On-Chain Analysis Points to Further Decline
An on-chain data analysis conducted by crypto analyst Ali suggests that Bitcoin is on the verge of sliding below $40,000 and potentially declining to $37,000. The analysis shows that Bitcoin is trading below a key supply area ranging from $41,200 to $42,400.
This supply zone has seen accumulation by 1.87 million addresses holding 730,000 BTC. With Bitcoin now below this zone, more losses are expected as traders aim to cut their losses.
Holders Torn Between Keeping Positions or Cutting Losses
With Bitcoin finding support at $41,000, holders are faced with the decision of whether to keep their positions open or cut their losses. The Relative Strength Index (RSI) suggests that cutting losses and buying after a rebound from a lower support area may be the better option.
The RSI is currently at 35 and not yet oversold, indicating the possibility of Bitcoin falling below $40,000. Additionally, trading below the 20 Exponential Moving Average (EMA) and the 50 EMA reinforces the bearish sentiment.
Key Factors to Watch Out For
Traders should pay attention to a possible rebound from the grey zone on the chart, as well as the strength of support in that area. The 200 EMA at $39,970 is expected to provide overhead pressure, but if selling intensifies, a drop to $37,500 could occur.
Hot Take: Bitcoin Faces Bearish Pressure Amidst Correction
Bitcoin’s recent correction has led to uncertainty in the market. With the possibility of BTC falling below $40,000 and facing resistance at key supply zones, traders are cautious about their positions. On-chain data analysis suggests further decline, and technical indicators reinforce the bearish sentiment. It remains to be seen whether Bitcoin will find support or continue its downward trajectory.
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