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Bitcoin Braces for Impact: Can $40,000 Hold?

Bitcoin CRASH: Can $40,000 HOLD?
Bitcoin CRASH: Can $40,000 HOLD?

Bitcoin price has taken a nosedive, plummeting from its once-lofty perch above $60,000 to a stomach-churning $4,680 low. This brutal correction has left investors wondering: is this just a temporary blip, or are we witnessing the beginning of a full-blown crash?

Technical indicators suggest the bear may be tightening its grip. The $41,500 level, which previously provided support, has now flipped to resistance, throwing a wrench into any hopes of a quick rebound.

Elliot Wave analysis throws cold water on bullish hopes. This framework points to a five-wave downward move, with the current pullback potentially being Wave 4. If this analysis holds, we could see a final Wave 5 plunge towards a target range between $4,141 and $4,475. This aligns with the broader market sentiment expecting Bitcoin to test the $30,000 mark.

Adding to the bearish picture, daily technicals paint a grim landscape. Both the 50 EMA and 50 SMA sit above the current price, further confirming the downtrend. While a short-term bounce to $45,000-$46,000 is possible, expect significant selling pressure to resume soon after.

A glimmer of hope shines on the weekly timeframe. The stochastic RSI, an indicator of momentum, is showing signs of correction, potentially finding support around $38,000-$39,000. This could lead to a temporary reprieve before the downtrend resumes.

In conclusion, while a short-term bounce is possible, the overall technical picture for Bitcoin remains firmly bearish. The $40,000 price level is crucial to watch, as a break below could trigger a more significant drop. Investors should proceed with caution and consider using risk management strategies to navigate this volatile market.

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