Bitcoin is still on a decline struggling below the $40K mark. This had been a significant hold point for the bulls but once the bears had successfully dragged the digital asset below this critical support point, it has been a long way down since then. While a reversal is likely at this point, it is also possible that the digital asset continues to record more decline, leading to as low as $34K.
Why Bitcoin Could Reach $34K
A new report from Delphi Digital outlines a possible trend for bitcoin. The digital asset which has recorded an extremely volatile month in February has shown no signs of slowing down. Although its price has touched as low as $33K this month, it has also seen a high of $45K. But neither of these two levels have been able to hold with BTC now trending around the midpoint.
Related Reading | TA: Bitcoin Resumes Slide, Why BTC Bears Aim $35K
Fluctuations are a natural part of the market, which is one of the biggest draws for investors, but it can also be a big problem for the digital asset. Because bitcoin is just as likely to make a large swing down as it is to move upwards.
BTC loses support above $40K | Source: Delphi Digital
Delphi Digital notes that the crypto market still remains range-bound through the volatile month of February. Thus after breaking through the $38.5K support level, bitcoin is likely to revisit range lows at around $34K. On the weekly chart, the wicks to the update are showing that it is currently a seller’s market, which could lead to more downtrends in the near future.
Struggle Becomes More Apparent
Sell pressure has been mounting on bitcoin since the December crash. This has become more apparent in market sentiment and the various dips that have accompanied the market-wide sell-offs, and bitcoin is still trying to shake off this multi-month sell pressure, says Delphi.
The report also notes that bitcoin has continue to stall for the past two weeks. Even in this state, it has been unable to reclaim any weekly support structure or the midpoint of the yearly range, both very important levels if the digital asset plans to mount another recovery.
BTC declines to $37K | Source: BTCUSD on TradingView.com
If the cryptocurrency can once more recover above $40K, it would need to hold above $40K-$41K to try to seal in another bullish structure. Since this structure has failed to hold in recent times and has broken below the $38.5K mark, then $34K is the next likely stop point. This does not mean it automatically forms support as bears will continue to pull the asset down.
Featured image from CNBC, charts from Delphi Digital and TradingView.com