After an unsuccessful wedge breakout, the price of Bitcoin have plummeted after it crossed the $40k mark initially. BTC has broken through the $37,800 support region. The next nearest support area is located at a trading price of $34,700.
Bitcoin Falls Below The $40k Mark
On the 4th of May, a falling wedge pattern was recorded by Bitcoin. However, the upward advance could not be maintained, and the price plunged drastically on the 5th of May.
Since hitting a local peak of $48,188 on the 28th of March, BTC has been on a downward trend. The downward movement resulted in a low of $37,396 on the 1st of May, which confirmed the support of the $37,800 horizontal region. Since the start of March, this level has assisted with various tasks. The value of Bitcoin first hit a peak of $40,023 on the 4th of May, but it plummeted the next day.
On the 5th of May, the price of Bitcoin formed a bearish expanding candlestick pattern. This resulted in a collapse of the support level at $37,800, which had formed in March, and hence the subsequent decline.
Bitcoin’s Breakout Attempt Was Unsuccessful
Since the 11th of April, BTC has been trading within a falling wedge on the six-hour chart. Although it did not take place with sufficient volume, it seemed to have finally broken out from the region on the 4th of May. The increasing trend could not be maintained in the end, and BTC dropped sharply on the 5th of May. The decline did occur in a large volume, which increased the claim’s validity.
However, despite the significant decline, the positive divergence trendline in the RSI chart is still present, suggesting that the $37,800 region may be reclaimed in the future. If this fails, the next nearest support location is identified at $34,800.
Movement Of Bitcoin In The Future
Despite the significant decline, the possibility that Bitcoin is advancing in a flat A-B-C correction structure remains. Currently, Bitcoin is trading within the Fib retracement resistance level of 0.786-0.85, which is a popular Fib region to hit bottom in the cryptocurrency market.
BTC Price Chart Source: Trading View
At the time of writing, Bitcoin is trading at $35,977, which is a 9% drop in the past 24 hours. Despite the drop in the price of Bitcoin, several analysts, such as Michael Saylor, are still bullish on Bitcoin and have encouraged investors not to sell out but to buy the dip.