Bitcoin Downtrend Intact; Support at $37K

A decisive breakout or breakdown could occur this month.

May 2, 2022 at 6:43 p.m. UTC
Updated May 2, 2022 at 8:09 p.m. UTC

Damanick is a crypto market analyst at CoinDesk where he writes the daily Market Wrap and provides technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also an equity/fixed income portfolio manager and does not invest in digital assets.

Bitcoin (BTC) has been in a short-term downtrend since late March, confirmed by a series of lower price highs. That indicates persistent selling pressure, although support at $37,500 could sustain the current price range.

Further, BTC has been anchored around $40,000, the midpoint of a three-month price range, which suggests indecision among buyers and sellers.

Typically, BTC consolidates within a three-month price range following an extreme move such as the 50% sell-offs that occurred after the April and November price peaks around $64,000 and $69,000 last year. That means a decisive breakout or breakdown could occur sometime this month.

On the weekly chart, bitcoin has experienced a loss of upside momentum, which suggests limited upside beyond the $46,000-$50,000 resistance zone. A bearish set-up on the monthly chart increases the risk of a breakdown in price.

For now, BTC is on watch for a countertrend bullish signal on the weekly chart, per the DeMARK indicators. If confirmed, BTC could experience a brief price bounce, consistent with strong seasonal trends in May.

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Damanick is a crypto market analyst at CoinDesk where he writes the daily Market Wrap and provides technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also an equity/fixed income portfolio manager and does not invest in digital assets.

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Damanick is a crypto market analyst at CoinDesk where he writes the daily Market Wrap and provides technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also an equity/fixed income portfolio manager and does not invest in digital assets.

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