Bitcoin (BTC) prices dipped below $40,00 today, bouncing south of that level on a daily basis and reaching their lowest point in nearly two weeks.
According to data from trading robots, the world’s most popular digital currency fell below $40,000 at 9:30 a.m. EST before falling to as low as $39,477.09 at about 11 a.m. EST.
This latest decline came after Bitcoin dropped dramatically yesterday, experiencing its worst intraday loss since January 21.
Bitcoin rebounded after falling to a recent low of $39,477.09, exceeding $40,400 in less than an hour, but then fell again, reaching levels below $40,000.
Global Political Uncertainty
Several commentators emphasized the impact of political instability on the markets when discussing Bitcoin’s recent price decline.
Yesterday’s downward price movement, according to Ben McMillan, CIO at IDX Digital Assets, was primarily a technical sell-off on the basis of prolonged anxiety regarding Ukraine and the President’s executive order on cryptocurrency regulation.
Ben Armstrong also added that the insecurity near the Ukrainian-Russian border has led to a reduction in the Bitcoin price. He is the founder of BitBoy Crypto.
He continued to mention that rather than a purely technical move, this could be a hint of underlying stress on Bitcoin’s price.
The Short-term Outlook on Bitcoin
Tim Enneking, managing director of Digital Capital Management, discussed the fundamental factors influencing Bitcoin’s price and what they might signify for the digital currency’s future prospects.
He said that even though $40,000 is a psychologically significant amount, there is nothing magical about it.
Enneking also added that “Even though the news has been generally good in the crypto space recently, the truly annoying high recent correlation with the SPX, coupled with geopolitical concerns focused around the pending (and seemingly inevitable) Russian invasion of Ukraine, is putting pressure on BTC for really no fundamental reason.”
He continued to say that, “That pressure hurts three primary theses of BTC: (1) safe haven, (2) non-correlated, and (3) inflation hedge.”
“The crypto optimist in me says that, once the invasion of Ukraine takes place, the price will drop (with fiat equity markets), but then recover more quickly and much harder than fiat markets. That remains to be seen, however.”
Key Technical Levels
Several specialists presented technical analysis detailing critical levels of resistance and support that Bitcoin may experience, in addition to offering light on what caused Bitcoin’s recent price moves.
This was discussed by Nick Mancini, a research analyst at cryptocurrency sentiment data company Trade The Chain.
“Bitcoin technical analysis shows key liquidity levels at $38,700 and $37,000, meaning there is a lot of buyer interest at those levels. If Bitcoin is unable to hold $40,000, it is likely to test those levels into the weekend.”
Brett Sifling, a Gerber Kawasaki Wealth and Investment Management investment advisor, also added his input.
He believes that on the downside there are two significant levels to keep an eye on. The first level is the current low, which was slightly under $33,000 on January 24th.
He believed that another big support level would be approximately $30,000, which has been in place since early 2021. If this $30,000 support level is broken, another significant downturn could be on the way.
Sifling also mentioned that in order for bulls to reclaim control, they would like to see a base build at or above the $50,000 mark before making a move towards $60,000 and eventually all-time highs.
With regards to potential resistance, McMillan said that Bitcoin is trading between the critical levels of $40,000 and $45,000, and a breakout from either side would probably be followed by a prolonged advance in that direction.
The head and shoulders pattern, a type of chart formation that typically indicates a trend reversal, was discussed by William Noble, the principal technical analyst at research platform Token Metrics.
He said that on the Bitcoin daily chart, there is a very apparent head and shoulders top. The failed rise to $45,000 and subsequent collapse verified the pattern.
With regards to prices, Noble mentioned that the following two major peaks are $36,700 and $34,000, and the most recent upward movement began at $36,700 and ended near $45,000.
TrustPedia is a financial portal-based research agency. We do our utmost best to offer reliable and unbiased information about crypto, finance, trading and stocks. However, we do not offer financial advice and users should always carry out their own research.Read More