Bitcoin bearish alert
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Investing.com – Taking advantage of renewed optimism as evidenced by the rebound in stocks, the price rose to a peak of $39,350 late yesterday afternoon, but the cryptocurrency quickly reversed those gains , with sellers responding as the key $40,000 threshold approached.
In addition, from a graphical point of view, it should be recalled that Bitcoin is currently in contact with an important downward trend line visible in daily data since the record high of last November.
At this point, a rejection from this downtrend appears to be the most likely scenario on a strictly technical basis. In this context, a return to the January low just under $33,000, or a new low around $30,000 remains possible. The threshold of $35,000 is also to be considered as a potential support, although less important.
A continued rise in Bitcoin that leads to a sustained hold above $40,000 would challenge this bearish view.
Tomorrow’s ECB meeting could influence Bitcoin
However, for the weekend, macroeconomic considerations could take precedence over the technical context. Indeed, investors are waiting for tomorrow’s ECB meeting with a firm footing, to find out what the Central Bank’s intentions are while the Fed, for its part, has clearly begun the process of monetary tightening.
Given the recent , we can estimate that a surprise in the context of the ECB meeting could impact the price of BTC, knowing that a more hawkish than expected ECB would penalize the cryptocurrency.
Short Squeeze in sight on the BTC?
Finally, note that in a blog post published this week, blockchain data analytics firm Glassnode estimated that a return above $40,000 could trigger a short squeeze.
Glassnode has indeed shared a chart showing the recent decline of long selloffs, which usually precede short squeezes when the price of BTC recovers.
Squeeze shorts occur when a broker or crypto exchange forcibly closes a trader’s leveraged position due to too large a partial or even total loss of the trader’s margin.
“With high negativity, high leverage, and an overall short bias, a reasonable case could be made for a potential short-term countertrend short squeeze,” Glassnode wrote.
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