Crypto Carnage Continues as Bitcoin Plunges Under $40,000, But These Indicators Look Promising
Bitcoin briefly traded below $40,000 on Monday for the first time since early December, extending a selloff that has shaved 35% off the cryptocurrency’s value so far this year.
According to market intelligence firm Santiment, discussion around Bitcoin and Ethereum has dropped 35% and 21% respectively compared to last week’s ETF approval frenzy. “FUD [fear, uncertainty and doubt] is beginning to enter the picture, which should create nice price bounce opportunities when it reaches its peak,” they noted.
The significant decline in chatter around the two largest cryptocurrencies signals waning interest during this latest market selloff. Traders will be watching to see whether conversation picks back up, which could foreshadow a sentiment shift.
From a technical standpoint, Bitcoin is testing key support levels. The 200-day moving average currently sits at $33,482, representing a long-term bull/bear threshold. Meanwhile, the relative strength index (RSI) has plunged to 26, indicating extremely oversold conditions that often foreshadow a bounce.
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Show more +Additional support may emerge around $36,767, which aligns with the 1.618 Fibonacci retracement of the recent major bull run. This area could provide a backstop to further downside.
Looking ahead, traders will be watching to see whether buyer conviction returns as Bitcoin tests these critical technical levels.
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