Bitcoin price is testing an important support zone, although long-term momentum remains weak

Bitcoin price declined by nearly 5% from a high of $30,654 yesterday, tracking losses in U.S. stock markets. The cryptocurrency has been stuck in a tight trading range over the past few days, although volatility remains elevated. That could increase the risk of more significant price swings or a potential breakdown on the charts. At the time of writing, BTC is changing hands at $28,850.

bitcoin-price-is-testing-an-important-support-zone-although-long-term-momentum-remains-weak

BTC/USD 4-hour chart | Source: TradingView

Bitcoin price and other cryptos plummet

Red for Bitcoin. Red for Ether. And even deeper red for major altcoins as investors continued to defy those who say that digital assets do not track stocks. Bitcoin was recently trading at about $28,850, within its range the past few days following the collapse of the TerraUSD (UST) stablecoin and the LUNA that supports it, but down 5% over the past 24 hours.

“The jury is still out on whether last week’s market-wide drop was the final buy the dip opportunity or one of several further drops in 2022. With price action tempering, the volume has come back to earth after the highest amount of crypto action in a year”, Santiment reported.

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Source: Santiment

Bitcoin has traded in a tight range of between $27,000 and $30,000 over the past few days. That’s a key support zone for BTC, and it is also the lower bound of a yearlong trading range. A decisive break below $27,000 could yield further downside targets for BTC, initially toward $17,823. Further, BTC’s downward sloping 50-day moving average indicates persistent trend weakness, which could keep sellers active.

Bitcoin faces strong resistance at between $33,000 and $36,000, which could stall an upswing in price. On the weekly chart, momentum remains negative despite oversold readings. That could increase the risk of a breakdown in price, similar to what occurred in March 2020 and November 2018.

“Tether whales continue to dump, and Bitcoin whale behavior isn’t looking much better. Our latest video analysis covers the continued seesawing prices and the not-so-fun half that crypto is on again”, Santiment added.

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Source: Santiment

Ether, the second-largest cryptocurrency by market capitalization, was off more than 8% over the same period after dropping below $2,000. Among the rest of the declining and the decrepit, SOL, AVAX, DOT, MATIC, SAND, and MANA were all recently down at least 12%.

The overall cryptocurrency market cap stands at $1.223 trillion, and Bitcoin’s dominance rate is 44.8%.

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