Home Price Analysis Bitcoin Price Slumps, will BTC/USD Find Support at $42k?

Bitcoin Price Slumps, will BTC/USD Find Support at $42k?

After the turbulence of the first half of the week, the Bitcoin price is stable, attempting to shake off bears and re-instill confidence in buyers.

As it is, the path of least resistance is still southwards, with bears in the driving seat despite optimism.

From the daily chart, the BTC price is waist-deep in red in the last week of trading.

During this time, the coin is down 10 percent, with bulls failing to assuage fears of more losses from a technical perspective.

The FED Will Keep Rates Low, Labor Market is Weak

Still, fundamentals are firm.

Understandably so. The U.S. FED, through its chair, thinks the economy will take longer to snap back to pre-Coronavirus levels.

Accompanied with fears of higher consumer prices and weaker than expected labor markets, fundamentals could pull the ladder off USD bulls.

In return, safe-haven assets, of which Bitcoin prominently features, may attract more funds from investors shifting away from fiat.

Expectations of rising inflation and more government borrowing have already seen bond yields rise to new two-year highs.

MicroStrategy and Square Buys More Bitcoin

At the same time, MicroStrategy and Square are doubling down on Bitcoin, purchasing over $1.177 billion worth of the coin.

The two are public companies, compliant with SEC rules. They are purchasing Bitcoin to fight against inflation, making digital gold a big part of their investment strategy. Michael Saylor—the CEO of MicroStrategy, said inflation would hit 10 percent in years to come.

Accordingly, their investment is a big boost for BTC, a legitimization stamp.

Bitcoin Price Analysis

Bitcoin Daily Price Chart for Feb 26

The BTC/USD price is bearish versus the greenback.

In the daily chart, the path of least resistance is still southwards—at least in the immediate term, despite upbeat bulls.

Support is at the middle BB and Feb 23 lows at around $44.5k.

However, sharp losses towards $42k—Jan 2021 highs–may pour cold water on this uptrend. If prices find support at $42k and a confirming bull bar with higher volumes prints, the BTC/USD price may rally back to $58k in the bull trend continuation pattern.

On the flip side, if prices slice through $42k—with equally high trading volumes, traders won’t dismiss the possibility of the Bitcoin price more than halving from peaks to $30k.

Chart Courtesy of Trading View

Disclosure: Opinions Expressed Are Not Investment Advice. Do Your Research.


If you found this article interesting, here you can find more Bitcoin news

Dalmas Ngetich
Dalmas is a very active cryptocurrency content creator and a highly regarded technical analyst. He has worked in various media as an analyst. He is passionate about blockchain technology, the futuristic potential of cryptocurrencies and enjoys the opportunity to help educate bitcoin enthusiasts through writing about his knowledge and analysis of coin price charts.
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