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Bitcoin remains under pressure after approaching $40K, further fall in sight?

Published 10/01/2022, 08:26
Updated 10/01/2022, 08:26
© Reuters.

© Reuters.

Investing.com - After a bearish start to the weekend, which saw Bitcoin fall towards $40,500 on Saturday night, the cryptocurrency rebounded on Sunday, peaking at $42,790, but this is not enough to significantly improve its technical profile, and the risks of a further fall are not to be ignored.

Recall that the profile of BTC/USD has deteriorated significantly since the end of December 2021, with Bitcoin sending numerous bearish signals, including a cross of the 50-day MM below the 100-day MM, a price move below the 200-day MM, and several broken supports and trend lines.

It should also be noted that the 50-day moving average ($49,620) is rapidly approaching the 200-day moving average ($48,260). A cross of the 50-day MA below the 200-day MA would be a major bearish signal called a "death cross" that could fuel bearish sentiment on Bitcoin.

In this case, the next support to consider will be the psychological threshold of $40,000, below which there is little credible support until around $37,500.

On the upside, there are many obstacles, but the most important is undoubtedly the 200-day moving average and the psychological threshold of $50,000,  and the $52,000 chart resistance. Only a return above the latter would begin to challenge Bitcoin's current bearish profile in daily data.

As for the other major cryptocurrencies, it is worth mentioning that the situation is similar for Ethereum, which approached $3,000 on Saturday night, and is currently trading at $3,170 on Monday morning, down more than 16% over a week, while Bitcoin is "only" losing 10%.

In fact, most of the top 100 cryptocurrencies, although in the green over 24 hours, still show heavy losses over the last 7 days. However, there are a few exceptions, such as Chainlink (top 23), which is up 31% over 7 days, Cosmos (top 24) which is up 6.65%, and Internet Computer (top 27) which is up 36%.

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