Bitcoin has been trading below $40,000 for the past couple of days as more liquidations continue engulfing the market.
The top cryptocurrency was down by 15.73% in the past seven days to hit $36,925 during intraday trading, according to CoinMarketCap.
To avoid a further slip, Bitcoin needs to hold the zone between $36,000 and $37,000. Market analyst Michael van de Poppe explained:
“First area of support is popping up at $36,000-$37,000, which is an area I’d look for if I’d want to search for some longs.”
Nevertheless, Bitcoin whales do not seem interested in the current prices based on shrinking demand. This could suggest that they expect the price to drop further before demand kicks in.
Crypto trader Ali Martinez noted:
“The number of whales on the network with 100 to 100,000 $BTC has remained flat since Feb 1. These wealthy market participants do not appear interested in buying BTC at the current price levels and could be expecting to buy Bitcoin at a discount.”
Data from IntoTheBlock shows that short-term BTC holders have been the primary catalysts of the liquidation being witnessed because their investments have shrunk by 8.7% since Feb 14. This trend is happening amid intensified tension between Ukraine and Russia.
On the other hand, Bitcoin can still turn the tables if it flips the previous resistance area between $38K to $40K to support.
Michael van de Poppe acknowledged that if this happens, then a drive to higher zones of $46,000 would become inevitable.
In January, the $38K-$40K zone acted as a high resistance zone that had proven a headache for Bitcoin to breach based on factors like planned interest rate hike by the U.S. Federal Reserve (Fed).
Image source: Shutterstock