Bitcoin continues to trend down over the weekend and appears at risk of retesting previous lows. The top crypto by market cap was rejected in the mid-area north of $40,000 and was unable to muster the momentum to sustain those levels.
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At press time, Bitcoin is trading at $39,921 down 1.2% and 5.2% in the last day and 7 days, respectively.
BTC is trending down on the daily chart. Source: BTCUSD Tradingview
Yuya Hasegawa, an analyst at Bitbank, attributes the recent price action of BTC to the situation between Russia and Ukraine. In that sense, the analyst expects a potential relief since the Secretary of State of the United States, Antony Blinken, and the Minister of Foreign Affairs of Russia, Sergey Lavrov, scheduled a phone call for next week.
This could defuse tensions around the situation at the border. On top of that, the analyst claims that Bitcoin is at “broad technical support” which could protect its price from further decline.
However, it is a long weekend in the US which usually leads to potential periods of high volatility driven by low trading volumes in the crypto market. Hasegawa said speaking of potential immediate and medium-term BTC price headwinds:
We still have the US PCE for January, the jobs report for February, and the CPI through to the FOMC meeting in March, so it’s safe to say that depending especially on these inflation data, the worst may be yet to come. to come, and even if the price bounces from the current level in the short term, the upside is likely to be quite limited, unless the Russian military shows some signs of retreating.
The macro-situation seems to occupy everyone’s attention. An independent analyst from Material Indicators (MI) claims that the situation between Russia and Ukraine could see a result after the Winter Olympics in Beijing. These events have been linked to similar crises in the past, such as the 2014 invasion of Crimea during the Russian-hosted Olympics.
Bitcoin to see short squeeze during the long weekend?
Other data provided by Material Indicators claims that BTC might have entered a distribution phase. Advising traders to “avoid catching knives”, especially during periods of low volume, MI introduced its Trend Precognition indicator which showed a bearish arrow on the daily chart as BTC price trended below $40,000.
The Material Indicator Trend Precognition Indicator showed a bearish signal on the daily chart. Source: Material indicators via Twitter
This could suggest that the benchmark crypto could retest its lows, which could find good support, as MI stated, “in areas of previous consolidation.” Levels between $35,000 and $38,000 were relevant during the previous BTC price sell-off and could trade as support.
However, MI noted that there are “liquidity gaps,” levels in the order book with low bid or ask orders, on both sides of the BTC/USDT trading pair. Therefore, Bitcoin could see a little squeeze to the upside or downside.
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Currently, there is about $10 million in bidding order around $39,500. Therefore, there appears to be strong support for BTC at that level, which could favor the bulls, at least in the short term.
BTC price (blue line on the chart) with potential support at $39,500 due to the concentration of buy orders (levels below the price). Source material indicators
This post Bitcoin Slows Drop Below $40K, What Is The Best Point For A Pullback?
was published first on https://www.newsbtc.com/news/bitcoin/bitcoin-slows-plunge-below-40k-whats-the-best-point-for-a-pullback/
