Bitcoin – BTC/USD daily chart
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Investing.com – Continuing a move initiated at the end of last week, the sharply accentuated its fall yesterday and last night, with a test of the major psychological support of $30,000.
BTC/USD has so far bottomed out at $29,900, which is a new 2022 yearly low.
Since last Thursday’s peak, close to $40,000, Bitcoin has therefore shown a fall of -25%, in less than 5 days.
Risk aversion sinks Bitcoin
Risk aversion rocking global markets is the main factor weighing on Bitcoin, with European exchanges losing more than 2% yesterday (-2.75% for the ) and US exchanges also starting the week in the red, with in particular the S&P 500 which closed down 3.2%, and the down almost 4%.
The war in Ukraine, uncontrollable inflation, and the rapid rise in central bank rates is creating a strong bearish cocktail for all risky assets, of which Bitcoin is an emblematic representative.
Today, risk appetite is likely to be influenced by several events, notably the German IFO business climate index at 11:00 am, and numerous interventions by members of the Fed and the ECB.
Check out the economic calendar for the full schedule of potentially influential events in Bitcoin and other markets today.
The loss of TerraUSD’s link with the Dollar is also in question
Another factor relating more specifically to the cryptocurrency market concerns the loss of the USD stablecoin’s link to the Dollar, which led to a . It also caused the Terraform Labs Foundation, which runs TerraUSD and Terra (LUNA), to sell some of its large Bitcoin reserves to support its stablecoin.
As blockchain data shows, Terraform Labs emptied its treasury wallet of all its bitcoins overnight Monday-Tuesday, or about 42,530 bitcoins, likely to free up the funds needed to try to stem the downward spiral in TerraUSD.
El Salvador buys BTC bottom
Note that as is the case with most major Bitcoin corrections, El Salvador, which gave Bitcoin official currency in the country last year, bought the dip, as announced in a tweet by President Bukele:
Technical thresholds to take into account on Bitcoin
From a technical point of view, it will be recalled that several major bearish signals have been recorded since yesterday, with in particular the passage below $35,000, and the test of $30,000. For now, the $30K threshold appears to have halted the decline, with Bitcoin attempting to climb back above $31k at the time of writing.
If BTC/USD confirms a return below $30,000, the next significant downside threshold is the July 20, 2021 low at $29,340 and then the January 2021 low at $29,340. Then, few supports can be spotted on the daily chart before the $24,000 area.
Finally, note that according to data from Glassnode, the average realized price (average cost basis among traders) of Bitcoin stands at $24,300. However, historically, realized price levels have corresponded to market lows, which preceded long trading ranges or a strong upward price trend.
Thus, some analysts expect BTC to eventually stabilize between $24,000 and $27,000.