Bitcoin (BTC) has recently fallen to $41,000 for the first time since September 2021. This move downwards has been the third consecutive correction since Bitcoin hit its all-time high close to $69,000 in November 2021. It is now time to understand whether Bitcoin would continue falling or if this is the lowest it can go for some time now.
Bitcoin Falls to $41,000
For the first time in more than three months, Bitcoin has reached $41,000 in some exchanges. The most popular virtual currency has experienced the third consecutive sell-off since hitting an all-time high.
This comes at a moment in which fundamentals could be challenging the price of Bitcoin. There are some things to take into consideration. For example, there has been FUD about Kazakhstan and miners moving to other countries due to the ongoing protests and social unrest in the country. This could have triggered part of the recent sell-off in the cryptocurrency market.
Another thing to take into consideration is the higher correlation between Bitcoin and traditional financial markets. If financial markets move lower, then it might be possible for Bitcoin and other digital currencies to follow the same trend. This is something that could be related to a larger number of companies and investors entering the cryptocurrency market. Let’s not forget that many institutional investors are now trying to get exposure to Bitcoin and cryptocurrencies.
Moreover, central banks around the world (with a specific focus on the U.S. Federal Reserve) are starting to increase interest rates. This comes after two years in which central banks have lowered interest rates to negative territory. This has affected individuals’ and companies’ capacity to protect their savings.
In recent months, we have seen inflation moving higher. Some countries are registering double-digit inflation. This is the reason why central banks are now putting a break in monetary expansion and trying to counter the negative effects of a loosened monetary policy in recent years.
When it comes to the technical aspects of Bitcoin price, we see that BTC has experienced a correction that took place with five different waves rather than a traditional ABC correction in terms of Elliott Waves theory. We also see that Bitcoin has reached a price level in which there is strong support.
In the past, the price region between $41,000 and $42,100 worked as resistance. Now it could start working as support as it already did in December and in September 2021.
Source: Read Full Article