Bitcoin (BTC), which saw its first plunge below $38,000 in more than two weeks, fell on February 20, as macro triggers rattled low volume weekend markets.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
BTC Trader: “Nothing to Get Excited About”
Cointelegraph Markets Pro and TradingView data showed that BTC/USD lost ground on Sunday due to threats of new sanctions against Russia for its alleged plans invading Ukraine.
After comments by Boris Johnson, the Prime Minister of the United Kingdom, on financial blocks in Russian companies should the situation worsened, crypto started to fall after a quiet Saturday.
They would be banned from “trading dollars and pounds” according to Johnson, who was quoted by the BBC Sunday morning. Johnson is referring to President Joe Biden’s support.
Cryptocurrency being the only market that is always open, it could be that the response to geopolitical concerns in the region could have a bigger knock-on effect next week than traditional markets. Monday is Wall Street’s holiday.
Mike McGlone (chief commodity strategist at Bloomberg Intelligence), commented on the situation and also called attention to the ongoing issue inflation and its relation to risk asset performance.
He suggested, in line with his previous comments, that Bitcoin could ultimately profit from the U.S.’s economic policy changes this year.
“Bitcoin indicates a rough week ahead. Inflation unlikely to drop unless risk assets do: Most assets are susceptible to the ebbing tide 2022, on an inevitable reversion to the greatest inflation measures for four decades. But this year may mark a milestone for Bitcoin,” he said.
Short timeframes are now less popular among Bitcoin traders. The loss of $40,000 has weighed on sentiment.
Also, we are no longer able to hold any support. As we are at support on LTF, I can see us retesting the 40K in the next few days. However, the HTF is generally not something to be excited about until we retake important levels.
— Daan Crypto Trades (@DaanCrypto) February 20, 2022
BTC/USD fell to $37,974 at Bitstamp Sunday but rebounded to stay above $38,000
Extreme fear rises from those who are dead
Others, however, continued to emphasize the importance of $40,000 in Bitcoin’s price history.
Related: Bitcoin inactive supply closes to record, as more than 60% of BTC remains unspent for at most 1 year
The level was first broken in 2021. It has been a springboard for bulls. Popular Twitter account Mayne suggests that a recapture is their first move to ensure upside.
BTC has reached $40k in the past year. We’ve witnessed a huge rally to the upside every time that price fell below $40,000. It said Sunday that it was a good place to be watching right now.
However, the majority expected new losses. After briefly entering “extreme fear”, the Crypto Fear & Greed Index fell to “fear” territory.
Screenshot: Crypto Fear and Greed Index Source: Alternative.me
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