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Bitcoin price continued its descent, briefly dipping below $40,000 and tracking losses in global equities

Bitcoin, Ether, and other significant cryptos continued their recent dive amid growing concerns about inflation and recession. Bitcoin price is not yet oversold and is roughly two days away from a pause in selling pressure. At the time of writing, BTC is changing hands at $39,414.

bitcoin-price-continued-its-descent-briefly-dipping-below-40000-and-tracking-losses-in-global-equities

BTC/USD 4-hour chart | Source: TradingView

Bitcoin price falls below $40,000 for the first time since mid-March

Down, down, Bitcoin is going down. Where it stops … that’s the question.

The largest cryptocurrency by market capitalization continued its plunge of the past two weeks on Monday. Investors kept backing off speculative assets amid ongoing concerns about inflation and a possible global recession.

Trading was light. Bitcoin recently fell below $40,000, a more than 5.4% drop over the past 24 hours and down from highs at the end of March above $47,000. Ether, the second-largest crypto by market cap, was trading slightly over $3,000 – a more than 6% decline over the same period – after dropping below this threshold earlier in the day for the first time since the middle of last month. Other major altcoins fared worse, with Terra’s LUNA token, SOL, and ADA in the red by double digits. Meme coins DOGE and SHIB also were beaten down significantly.

“Traders appear to be buying the dip after Bitcoin fell below $40k today for the first time since March 16th. The keyword “buy” is THE trending term in crypto after market-wide prices have dipped drastically after March’s rebound. Be mindful of FOMO”, Santiment stated.

bitcoin-price-continued-its-descent-briefly-dipping-below-40000-and-tracking-losses-in-global-equities

Source: Santiment

Bitcoin is extending its pullback that began on March 28 after buyers failed to break above the $48,000 resistance level. The cryptocurrency is not yet oversold, although lower support at $37,500 and $40,000 could stabilize the down move.

BTC was down as much as 7% over the past 24 hours. Countertrend signals, however, are roughly two days away from an inversion (selling exhaustion), per the DeMARK indicators. The daily chart’s relative strength index (RSI) is approaching oversold levels, which could pause the current price drop. Still, oversold readings could persist for a few weeks, similar to earlier this year.

On the weekly chart, momentum signals are still positive. That means BTC’s recovery from January lows remains intact as buyers can maintain support above $37,500. Despite short-term price rises, further upside beyond $50,000 could be challenging given negative momentum signals on the monthly chart, similar to what occurred during the 2018 crypto bear market.

The overall cryptocurrency market cap stands at $1.831 trillion, and Bitcoin’s dominance rate is 41.1%.

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