What’s Next For Bitcoin Prices After Their Recent Drop Toward $40,000?

Bitcoin prices suffered a modest pullback this weekend, approaching $40,000 after rising to more than $42,000.

The digital currency fell close to $40,500 on Sunday, March 20, CoinDesk data shows.

The cryptocurrency dropped to this level after rising to nearly $42,400 earlier in the weekend, additional CoinDesk figures reveal.

Since then, the digital asset bounced back, climbing above $41,500 late this morning and then fluctuating within a reasonably tight range.

Following these developments, several market experts weighed in, providing technical analysis to give investors a sense of where the digital currency might go next.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

“I expect this support at $40,000 to hold for a while,” said Mark Elenowitz, co-founder of Ethereum-powered exchange Upstream.

“The fact that Bitcoin stayed above that level despite the recent retracement – and despite an avalanche of bearish global macro news of late – indicates to me that there is significant support at level and then around the $34,000.”

Richard Usher, head of OTC Trading at BCB Group, also singled out the $40,000 price level.

“Initial support is found at the psychological 40,000 level with stronger support at 37500,” he stated.

Usher also offered some insight on the resistance bitcoin could encounter if it rallies.

“The key resistance level remains at 45500/4600, a break of which should end the recent period of consolidation and target 52000 and beyond.”

Josh Olszewicz, head of research at Valkyrie Investments, provided some technical analysis, identifying an ascending triangle, a bullish pattern that could signal a breakout.

“Technical analysis for Bitcoin continues to suggest the formation of an ascending triangle, which carries a bullish bias,” he stated.

“The chart pattern yields a 1.618 fibonacci extension and measured move of $50,000 to $55,000 and remains active so long as no lower lows in price are achieved. The probability of this pattern resolving as expected declines significantly once price breaches the diagonal support,” added Olszewicz.

“Significant downside volume support sits from $32,000 to $38,000, should the pattern fail,” he continued.

“The 200-day exponential moving average (EMA) also sits at $44,500, matching the horizontal resistance on the ascending triangle. The 200-day EMA is also used as a litmus test for bullish or bearish trends.”

“A price breach above this level would signify a bullish trend reversal,” noted Olszewicz.

Brett Sifling, an investment advisor for Gerber Kawasaki Wealth & Investment Management, highlighted areas of support and resistance he found crucial.

“Bitcoin has continued to be rangebound between $35,000 and $45,000 over the past few months,” he stated.

“I would expect a breakout or breakdown if either of those support/resistance levels are broken,” said Sifling.

“From a technical standpoint, the longer that an asset consolidates/tightens it’s trading range, the more dramatic move that follows.”

“If we do break the $35,000 support level, all eyes will be on $30,000, which has remained a major support on this bull cycle since early 2021. A break of that could suggest further pain for Bitcoin and the broader digital assets market.”

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.