Bitcoin Crashes Below $40K – Brace for a Bounce

BTC/USD closed at $40,664, after placing a high of $43,622, and a low of $39,678.0.The BTC/USD extended its losses, declining for third consecutive session on Tuesday, to reach its lowest level since August 5.

 

Bitcoin dropped below the $40K level on Tuesday, following the crash in the global financial markets. The cryptocurrency market also followed the global stock markets downwards, reaching new monthly lows on Tuesday, amid the growing uncertainties. While Bitcoin suffered declines of several thousand-dollars in a day, the altcoins were hit even harder, with massive double-digit price dumps. Neither was the cryptocurrency market spared, since it was affected by the fears prompted by the potential collapse of Evergrande. Bitcoin declined from $48K to below $40K, and recorded a massive sell-off. ETH/USD also fell, and reached below the 3K level.

 

The massive sell-off in the market could also have been triggered by the latest comments made by cryptocurrency enthusiast and American TV personality Jim Cramer. In his opinion, the Evergrande debt crisis in China could keep causing severe disruption in the financial markets, including the cryptocurrency market. He advised people to cash out some of their cryptocurrency holdings to prevent future losses.

 

Technical Outlook

Trading in Bitcoin was sharply bearish, dipping below $40K, but it has now risen above the $41,271 level again. At the moment, Bitcoin is trading at $42,588.73, and it is heading towards the next resistance level of the 43,000. BTC managed to break out of this level, exposing the Bitcoin price to the next resistance level of $44,500. This particular resistance level is being extended by an upward trendline, which can be seen on the 4-hourly timeframe. The closing of candles below the $44,269 level could help us capture a sell trade in Bitcoin.

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