Technical analysis suggests that the world’s most traded digital currency is struggling to break above the $38,800 barrier, with falls to lows of about two months in the range of $37,500. If bitcoin continues its bearish endeavor below the $39,000 level, it could depreciate significantly. However, there is hope as a clear move above the 23.6% retracement level of the key decline has been seen from the roughly $40,350 high to $37,400 low.
Experts now fear that the price of the top cryptocurrency could drop further if it fails to hold the $38,000 price level. Additionally, profit booking by traders may be why Bitcoin is struggling to break above the $40,000 level.
“Over the weekend, Bitcoin’s recovery was put on hold. The rejection of levels near $40,000 could be attributed to profit taking. Simultaneously, support at $38,000 could hold due to increased buying sentiment,” Darshan Bathija, CEO and co-founder of Vauld, told FE Online.
However, “the cryptocurrency could continue to decline if the market volatility continues in May,” Moya comments. “The $35,000 level should provide important support for bitcoin, but if the Fed decides to be more aggressive in tightening policy, the drop could be heading to the $30,000 region.” comments the Oanda expert.
On Wednesday, the Fed will discuss a 75 basis point rate hike, but will most likely settle for a 0.5% increase.
The market has priced in a strong start to the cycle of rate hikes, “but the big question is how aggressive they will be with the quantitative adjustment,” concluded Moya.
Source: Ambito
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