The Bitcoin price has been pressured since its rejection from the 200-DMA at around $48,000 in late March. Last week, the BTC/USD pair failed to hold above the 20-DMA, adding to a more downbeat technical picture. Furthermore, the selling pressure intensified on Monday as the digital currency plunged to the $40,000 psychological support last seen nearly three weeks ago.
Cryptocurrencies are trending lower along with traditional risky assets as geopolitical concerns, and inflation worries cap bullish attempts in the global financial markets. Meanwhile, the safe-haven dollar has been rallying these days, challenging the 100.00 psychological level amid a more hawkish tone from the Federal Reserve and the ongoing sell-off in the bond market.
Now that the price of bitcoin is around $40,000, it looks like deeper losses could lie ahead before a reversal takes place. In other words, the coin is probably yet to find a bottom that could be hit in the days to come. On the downside, the next immediate support now arrives in the $37,500-$37,000 region, followed by the $35,000 handle that has been intact since late February. Should $40,000 withstand the pressure in the near term, a bounce-back above $43,500 could be expected.
In the broader picture, the BTC/USD pair could struggle to regain the $50,000 mark in the medium term due to growing so-called macro risks. Also, as the US dollar and bitcoin have an inverse correlation, the persistent bullishness surrounding the greenback is likely to continue to cap the upside potential for the most popular cryptocurrency as the Fed takes aggressive steps towards monetary policy normalization in the coming months and quarters.