- Bitcoin plunges below $41,000 while a couple of negative news stories circulate within the crypto markets
- While the majority of the tokens have dropped significantly, it could be a good chance for the market participants to make an entry
In a shocking update, Terraform Labs filed for bankruptcy protection plunged the prices of LUNA and LUNC by over 5%. Meanwhile, the Bitcoin price was speculated to undergo a bearish reversal, with the technicals pointing towards the south. Therefore, negative sentiments have fueled the descending trend, which may further transform into a bearish trend with the BTC price losing support at $40,000.
Will the Bitcoin price trigger a rebound, or could negative sentiments prevail, leading to a prolonged descending trend below $40,000? If it does so, is this the right time to buy BTC?
The BTC price has conducted its weekly close and unfortunately failed to close above the previous week’s levels at $41,700. The token has recorded a bearish close for two consecutive weeks, forming a bearish shooting star and a bearish spinning top. These candlestick patterns have raised many concerns, and if BTC bulls fail to defend the support, the price may even drop to $35,000.
The weekly chart of Bitcoin shows the price is stuck between major resistance and support levels at $41,913 and $40,741, respectively. In terms of support, $40,000 is acting as strong support, with $37,000 as the first line of defence and $30,000 as the second one. With the weekly RSI following a descending trend, more price corrections are expected to follow. Despite the volume continuing to remain low, bearish activity has increased heavily.
Any future trades may be extremely risky at the moment, as a potential pullback can only revive long trades. If the bulls fail to hold the support at $40,000, which is likely, the BTC price could plunge another 10% to enter the support zone between $36,189 and $34,684. This can be considered the last line of defence, and a steep drop below $30,000 may be expected if the price breaches the zone.
However, a rebound from the pivotal support zone may eventually differ from the bearish trajectory for a while, as only a huge influx of buying volume can elevate the Bitcoin (BTC) price above the bearish influence.
