Is BTC about to break below $40,000 or will the bull market continue? (Bitcoin Price Analysis)

Despite positive developments such as the approval of Bitcoin spot ETFs by the US Securities and Exchange Commission, the price of Bitcoin faced significant rejection, resulting in a notable decline of 17%.

However, as the cryptocurrency approaches a crucial support area, there is a possibility of a fresh upward move.

Technical analysis

By Shayan

The daily chart

Analyzing the daily chart, Bitcoin's attempt to overcome significant resistance at $48,000 was met with rejection, resulting in a 17% decline towards a critical support area. It includes the middle boundary of the ascending channel and the crucial 200-day moving average at $39,000, serving as solid support for Bitcoin buyers.

If the retracement continues, the price is expected to find support around $39,000, potentially triggering a fresh uptrend. However, an unexpected break below the 200-day moving average could result in a cascade that triggers a significant amount of sell stop orders, resulting in a long squeeze event.

Source: TradingView

The 4 hour chart

On the 4-hour chart, the rejection of the $48,000 resistance zone extended, with the price falling below the lower boundary of the ascending flag, indicating the presence of sellers. However, after a strong breakout, a pullback towards the lower boundary of the flag is underway, potentially completing a pullback. Should this happen, the decline could pave the way for Bitcoin to continue its downward move in the short term and target the static support area at $39,000.

Nevertheless, Bitcoin's medium-term outlook points to consolidation within the critical price range, which is capped by the significant resistance zone at $48,000 and the crucial support at $39,000. Nevertheless, a successful breakout from this zone will shed light on the cryptocurrency’s next impulsive trend.

Source: TradingView

On-chain analysis

By Shayan

As Bitcoin faces significant price rejection, concerns are growing among market participants about the sustainability of the current uptrend. Valuable insights can be gained by analyzing the sentiment on the futures market.

The chart below illustrates Bitcoin funding rates – a key indicator for futures market sentiment analysis. It helps assess whether buyers or sellers are executing their orders more aggressively.

Despite the recent short-term correction, financing rates have fallen significantly. What is noteworthy, however, is that the metric still shows positive values. This can be interpreted as a positive sign, suggesting that sentiment remains positive as the futures market cools down from overheating.

Therefore, there is a possibility that the price will continue its upward trend after the current correction phase is completed.

Source: CryptoQuant
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Cryptocurrency charts from TradingView.

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