Bitcoin’s price action stabilises on the opening day of a week that will put traders’ resolve to the test on several occasions.
Bitcoin (BTC) remained stable above $39,000 heading into Monday’s Wall Street closing, as stocks took advantage of the opportunity to recoup some of their losses.
Bulls require a “miracle” to regain $40,600
The pair had recovered from a late-night sell-off into Sunday’s weekly close to avert a deeper drop thus far.
However, the week was poised to present numerous possible roadblocks for bulls, beginning Monday with a European Parliament vote to ban Proof-of-Work algorithm cryptocurrencies.
Wednesday, on the other hand, was the primary focus, as it was the day the US Federal Reserve was scheduled to announce a significant interest rate hike of a speculated 25 basis points.
Meanwhile, geopolitical tensions surrounding Russia’s invasion of Ukraine, as well as a recurrence of Coronavirus in China, added to the list of obstacles.
Traders were so pessimistic about immediate prospects, given the market’s difficulties. Crypto Ed anticipated that the 0.618 Fibonacci level at roughly $40,400 would serve as a local peak before a deeper pullback took hold.
Only a “miracle” $40,600 recapture, he stated, could result in a bullish outcome.
Looking for a retrace to the .618fib which lines up with taking out latest top (stop hunt)
Pic 1: take out the low TF range high
Pic 2: lines up with my S/R at 40.6k
Going short when sweep of the highs in a SFP.
Long when a miracle happens and clear reclaim of $40.6k pic.twitter.com/Ic3uNTxGGH
— Ed_NL (@Crypto_Ed_NL) March 14, 2022
Meanwhile, fellow trader and analyst Anbessa noted a $37,600 resistance level for bulls to defend.
Materail Indicators, an on-chain monitoring platform, also detected heightened sell pressure at $40,000 on Monday.
“The new BTCUSDT ask liquidity that has developed recently appears to be attempting to push price down to the bid ladder below. Expecting it to be withdrawn if bids are filled, “The account made a comment on a graphic depicting the Binance orderbook’s changes.
Bitcoin is “cold” in comparison to oil, according to a Bloomberg analyst.
With a longer time horizon in mind, Bloomberg Intelligence chief strategist Mike McGlone reiterated his belief that Bitcoin would eventually emerge stronger from the current turmoil.
On the day, he highlighted that bitcoin was bucking a “ebbing tide” in risk asset demand by retaining the lion’s share of its support.
“The fact that one of the best performing and most volatile assets since the financial crisis — Bitcoin — is showing relative buoyancy in the face of an ebbing tide of risk assets in 1Q may portend the crypto’s maturation toward digital collateral, in a world that is moving in that direction,” he argued alongside a chart comparing WTI oil to BTC.
As the week began, commodities remained the movers, while oil futures began to cool.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.