Leading analysts called the $40,000 price level a ‘strong support’ level for Bitcoin. While the crypto asset remained above the mentioned level for most days in February 2022, the recent selling pressure from retail traders has pushed the price of BTC to its lowest level in approximately 2 weeks.
On Friday 18 February, Bitcoin dipped below $40,000 and reached a low of $39,600. In terms of weekly performance, BTC is down by almost 5%. Similar to previous market trends, the activity across the BTC network has plunged in tandem with the price performance of the digital currency.
“There are currently 275k daily active entities on the Bitcoin network. This level of activity is far below bull market highs,” the on-chain analysis platform, Glassnode noted.
The latest selling pressure is mainly driven by the panic among short-term holders of the crypto asset. While long-term Bitcoin holders remained unshaken during the market correction, the realized losses of short-term holders have spiked.
$40k Price Level
Apart from the market correction between May and July 2021, triggered by China’s crypto mining ban, Bitcoin stayed above the $40,000 price level throughout the last year.
Commenting on BTC’s recent price action and its correlation with other financial assets, the crypto intelligence firm, Santiment, said: “BTC dropped below $40k for the first time in 2 weeks. With the drop, the 30-day MVRV, a great swing trade metric finally went into a negative range. Bitcoin is barely hanging near $40k, and this mid-sized drop to end the week coincided with the SP500 once again dropping. Meanwhile, gold has soared to an 8-month high. Look for a BTC correlation break to be a sign of a positive breakout.”
Despite all challenges, the overall hash rate of BTC reached a record high of 194 EH/s in the last week.
