A support fallout from a flag pattern suggests further correction in Bitcoin(BTC) price. The successful retest validates this breakdown, followed by a 4% decline in price. Responding to the pattern fallout, the coin price could hit $36650 and, with sustained selling, the $30000 mark.
Key points on BTC analysis:
The BTC price give witnessed a 9% fall within a fortnight
An upside breakout from the $40000 resistance would invalidate the bearish theory
The intraday trading volume in the Bitcoin is $27.3 Billion, indicating a 3.2% gain
On April 22nd, the Bitcoin(BTC) price gave a bearish breakout from a four-month-old flag pattern. Amid the pattern fallout, the coin holders lost the $40000 psychological support, intensifying the ongoing correction.
After spending a week retesting these breached support levels, the BTC price continues to decline to reach its current value of $37909.
The sustained selling would hit the near support of $36650, and the following breakdown would sink the coin to January bottom support at $30000.
Any unexpected pullback needs to overcome the descending trendline and $40000 to provide a recovery sign.
NVT Ration hints Bitcoin(BTC) is undervalued
The Network Value to Transactions (NVT) Ratio created by Willy Woo indicates the relation between market capitalization and transfer volume. It is calculated by dividing market cap(USD) by daily transfer volume(USD).
A high NVT value indicates the Market Cap growth exceeds the transaction volume, suggesting the BTC price is trading at a premium or overvalued.
Conversely, a low NVT value is considered the coin price is trading at a discount or undervalued.
The current value of the NVT ratio is near 26(undervalued), a level last seen in early 2016 and late 2017, which triggered a significant upward move.
Despite descending price action, the RSI slope forming a higher low suggests losing bearish momentum. This bullish divergence gives the price to rebound in the near future.
A slight down curve in crucial EMAs(20,50, 100, and 200) suggests bears have the upper hand in the overall sideways rally. Moreover, the 20-day EMA offers constant resistance to the BTC price.
Resistance level- $40000, $42350
Support level- $36650, $33000
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.