Bitcoin managed to hold on to $38,000 on Tuesday. The price action invites pessimism as the digital currency has suffered sharp declines after unsuccessfully facing resistance at $45,000 and there are not a few who believe that the 30,000 dollars come back into play. However, “on the support side, the most important of all of them is at the lows of January in the US$32,855”, expressed José María Rodríguez, an analyst at Bolsamanía. “32,500 looks more like the ‘point of no return,'” agreed John Kicklighter, chief strategist at DailyFX.
“The crisis between Russia and Ukraine is affecting all risk markets right now, not just bitcoin,” said Nicholas Cawley, strategist at DailyFX. “The constant oscillations of good and bad news make it difficult to value and trade the market at the current time”, indicates the expert, who believes that until this changes “it’s hard to see any reason to trade bitcoin from the long or the short side.”
The expert opined that from a technical perspective, the break below support at $39,600 has left bitcoin vulnerable to further losses. This negative outlook has overshadowed the recent good news in the market, “whose fundamentals are improving day by day,” said Naeem Aslam, an analyst at AvaTrade. Ukraine has legalized bitcoin and Russia is in the process of doing the same for investments in digital currencies. In addition, there have been reports of Fidelity launching a bitcoin ETF in Europe and news that BlackRock, the $10 trillion asset manager, is preparing to offer cryptocurrency support for its clients. These reports “normally would give the crypto space a boost to the upside, but this has not been the case,” Cawley says.
According to analysts, bitcoin will continue to move sideways with a marginal downward bias “until the conflict in Eastern Europe is resolved,” says the DailyFX analyst. “Bitcoin is an unwitting participant in the volatility that is affecting all risk assets due to the tensions between Russia and Ukraine”explained Edward Moya, an analyst at Oanda, for his part. “The cryptocurrency rollercoaster won’t end anytime soon, but it could get ugly if Wall Street suffers further selloff as investors begin to expect a protracted military conflict.”
The queen of crypto currencies could be the victim of a fight for cash, Moya expressed, “but once the wave of panic selling passes, the long-term bets would quickly return. Moya added that “hodlers could be put to the test shortly,” using the term for crypto investors who hold their positions regardless of price.
In the rest of the market, the behavior of altcoins follows bitcoin. Most maintain notable losses in the last seven days, despite turning green in the last 24 hours and the total market capitalization has risen to 1.73 billion dollars.
Ethereum withstood bear pressure above $2,500 support and is trading above $2,600, but experts believe it remains exposed to further declines before stabilizing as it accumulates losses 15% in the last seven days. Ether – the unit of the Ethereum network – has multiple strong support levels at $2,200 and $1,850 and technical analysts do not believe it will go below $1,800 any time soon. In general, they indicate that any drop below these levels is a buying opportunity.
Source: Ambito
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