Bitcoin price has dropped considerably over the last three weeks. The recent downswing has made things worse for BTC and hints that a steep correction could be on its way.

Bitcoin price is in a bearish outlook after the recent crash as it sliced through the $39,573 to $46,406 demand zone. If BTC produces a weekly candlestick close below $39,573, there is a good chance this downtrend will extend lower.

The demand zone extending from $39,573 to $46,406 was major support formed during an uptrend. Therefore, investors that bought BTC at or around this barrier are underwater due to the December 4 crash.

Any upswing that originates after a decisive close below $39,573 will face immense selling pressure from these underwater investors trying to break even. Therefore, the fate of the big crypto is dependent on this week’s close relative to the $39,573 level.

Assuming Bitcoin price fails to recover the recent losses, market participants can expect an 11% crash to the $34,266 support barrier. Here, buyers will probably band together for a comeback. This scenario is unlikely, however, as market makers will likely drag the pioneer cryptocurrency below $31,671 to collect the sell-side liquidity resting below the series of string lows formed in July 2021.

The number of daily active addresses paints a picture of the investors’ sentiment and their view on the current price of Bitcoin. In the image attached below, the 50-day Moving Average (MA) of DAA has crossed below the 200-day MA, indicating a bearish crossover. The last time this occurred was on May 17 and was followed by BTC crashing from roughly $46,000 to $29,000.

If history were to repeat itself, there is a good chance Bitcoin price could revisit $29,000, coinciding well with the target forecasted from the technical perspective.

Bitcoin Under Strong Selling Pressure

Jan 21 2022