Bitcoin Takes a Nosedive. Key Support Broken

Triple Bottom Shattered. Where Is BTC Headed Next?

After a period of sluggish and sideways movement, the apex cryptocurrency is showing signs of increased bearish momentum. The decline started after a touch of $40,000 resistance and now the pair has breached the key support at $37,500, which is the place where the triple bottom formed.

Back in February – March 2022, BTC/USD touched $37,500 three times and each time it bounced higher, successfully forming a triple bottom. This is a very bullish pattern and as predicted at the time, it triggered a move up, creating a top near $48,200. However, after reaching the said top, BTC/USD started to slide lower and hasn’t stopped since.

According to cryptocurrency data analysis firm Coinglass, during the last 24 hours, more than 102,600 traders’ positions were liquidated, adding up to more than $400 million worth of liquidations. The largest liquidation happened on Okex (BTC/USD SWAP) and it was worth $3.74 million. The majority of liquidated traders held long positions and according to on-chain analysts, this is one of the largest liquidations since the January crypto crash.

Thursday Bitcoin lost over 8.0%, despite a recent purchase of $1.5 billion worth of BTC made by Luna Foundation Guard, the company behind LUNA and UST (TerraUSD), which are currently ranked 8th and 10th, respectively on CoinMarketCap.

Last month, Terra became the first blockchain venture to have two coins in the Top 10 and the recent purchase makes them the second-largest BTC holder, surpassing Tesla. Luna Foundation Guard currently holds 80,393 BTC, while the biggest Bitcoin holder is still MicroStrategy, with 129,218 BTC.

Chart Analysis – BTC/USD

Bitcoin is currently trading at $36,229, with an 8.55% loss over the last 24 hours. Bearish momentum is increasing and the recent break of the key support at $37,500 will probably add even more downward pressure.

During the first day of the current month, the pair bounced at $37,500, making it look like the triple bottom still has a role to play but the bullish move failed as soon as the $40,000 resistance was touched. This behaviour combined with the recent break of support shows that the losses will extend further and that the pair is probably headed towards the support at $35,000.

The MACD and RSI do not show strong momentum or an extreme condition: the MACD lines are close together and BTC is not oversold according to the RSI. For now, the outlook is bearish but Bitcoin can turn on a dime, thus support levels should be treated with caution.