The world’s largest cryptocurrency starts a new week with a decidedly bearish move, but one which fails to reduce investor sentiment in the bull run. The situation is quite complicated, as not just Bitcoin, but stocks and sentiment are taking a beating as China Evergrande Group implosion in China unravels.
Analysts expect a “turbulent” week for the BTC price action. So, let’s look at several factors worth considering when charting where Bitcoin might be headed in the short term.
Its spot price action is hardly inspiring for traders as the week begins. A turnaround of previous strength on Sunday was compounded overnight, and BTC/USD lost the $46,000 mark. Due to turmoil in traditional markets headed by the Evergrande saga, this week may well not end up offering profitable trades. Currently, it is time to take stock and wait for the situation to resolve itself according to popular trader Pentoshi.
For the major cryptocurrency, $44,000 represents a support wall which Bitcoin now looks set to retest. A more serious dive could yet yield $41,000 or even $38,000, the latter forming a key Fibonacci retracement level.
All in all, the mood remains firmly in favor of upside returning across cryptocurrency markets into Q4.
Importantly, among those “buying the dip”, in the meantime, is the government of El Salvador. The country’s government on Monday confirmed that it purchased another 150 BTC for total holdings of 700 BTC.
After taking into consideration all factors, Bitcoin is performing much better than expected. Whether it is gold or stocks, the situation is decidedly less rosy this week. For instance, the S&P 500 is on track to close below its 50-day moving average for the first time since June.
In the case of gold, it is heading towards its lows from April. The precious metal is close to its lowest level in many years against the Nasdaq 100 index.
Both difficulty, as well as hash rate, are refusing to trend downwards, suggesting that the underlying conviction of miners remains unwaveringly bullish. The mining difficulty is now on course to put in its fifth consecutive increase on Tuesday.
Things like that are quite rare. The last time, it increased five times in a row began in 2019, before March 2020 cross-market crash soured the mood. So, for those who believe that price action must follow network fundamentals, the outlook seems more bullish than ever.
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