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Bitcoin price slides below $40K following a ‘lackluster’ breakout

Bitcoin price slides below $40K following a ‘lackluster’ breakout

Intense fear has once again become the dominant sentiment in the crypto community after Bitcoin (BTC) faced another day of trading below the $40,000 level. Meanwhile, the United States is struggling with the highest Consumer Price Index (CPI) number since 1981.

Bitcoin price slides below $40K following a ‘lackluster’ breakout
Index of fear and greed in cryptography. Source: Alternative.me

Data from Cointelegraph Markets Pro and TradingView shows that the early morning attempt to rise above $40K hit a wall of resistance at $40,650, with Bitcoin eventually dropping below $39,600.

Bitcoin price slides below $40K following a ‘lackluster’ breakout
BTC/USDT 1-day chart. Source: TradingView

Here’s a look at what many analysts are saying about the current state of bitcoin and what could happen next as financial markets grapple with an increasing amount of uncertainty.

Bitcoin is simply retesting a major S/R area

Bitcoin’s current price action is largely seen as a retest of a major support and resistance (S/R) area, according to crypto analyst and Twitter user pseudonym “Credible Crypto.” Spread The following chart shows the multiple retests of this level going back to 2020.

Bitcoin price slides below $40K following a ‘lackluster’ breakout
BTC/USD 1-week chart. Source: Twitter

According to Credible Crypto, the middle green circle and the last red circle both provide previous examples of intra-week movements that either rose or fell below the weekly level, “but this means nothing without confirming the close.”

Credible Crypto said,

“Give me the closure under BLUE and I’ll change my tune, but for now there’s no reason to.”

Some analysts expect a lackluster recovery

Insights into on-chain Bitcoin investor behavior were discussed in the latest weekly report from Glassnode, which noted that there was a “modest amount of profit-taking by investors” after BTC broke out of a multi-month consolidation range.

According to Glassnode, “the market has seen gains of around 13,300 bitcoins per day since mid-February.” While this value is not “historically extreme”, it appears to “provide enough headwinds for prices”.

Bitcoin price slides below $40K following a ‘lackluster’ breakout
Bitcoin made a profit. Source: Glassnode

Overall, Bitcoin’s recent recovery has been relatively muted as the market awaits some major catalyst to help bring fresh momentum and fresh flows into the cryptocurrency market.

Glassnode said,

“Especially across metrics of on-chain activity such as the number of transactions and active users, the recovery so far has been relatively lackluster and continues to indicate that Bitcoin is a HODLer-dominated market, with a small number of new investors coming in.”

Related: Ethereum price ‘ascending triangle’ puts 4-year highs against Bitcoin within reach

“MEGA PUMP” is coming

Strongly bullish narrative highlighted by cryptocurrency trader “BTCfuel” Spread The following chart shows the possibility of an impending Bitcoin “huge pump”.

Bitcoin price slides below $40K following a ‘lackluster’ breakout
BTC/USDT 1-day chart. Source: Twitter

BTCfuel said,

“When looking at the RSI, the correction of 2022 Bitcoin is very similar to 2021. A strong upward movement is imminent.”

The total cryptocurrency market capitalization now stands at $1.850 trillion and the Bitcoin dominance rate is 40.9%.

The opinions and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.