The currency seems to be at risk of re-testing its previous lows. The first by market cap was rejected north of $40,000 and was unable to hold those levels.
As of press time, Bitcoin trades at $39,921 with a 1.2% and 5.2% loss in the last day and 7 days, respectively.
According to Yuya Hasegawa, analyst for Bitbank, the recent price action of BTC is related to the Russia-Ukraine situation. The analyst thinks that the U.S. could get some relief. A phone call was scheduled for next week between the Secretary of State and the Russian Minister of Foreign Affairs.
Tensions at the border could be lessened by this. Ample technical support is what the analyst claims could protect the price from further decline.
There is a long weekend in the United States. It usually leads to periods of high volatility because of the low trading volumes in the market. Hasegawa talked about the immediate and medium-term potential challenges of the price of BTC.
We still have the January U.S. PCE, February jobs report, and CPI until the March FOMC meeting, so it is safe to say that, depending especially on these inflation data, the worst may be still ahead of us, and even if the price rebounds from the current level in the short term, upside is likely quite limited unless the Russian military shows some signs of retreating.
Everyone is paying attention to the macro- situation. After the Winter Olympics in Beijing, the Russia-Ukraine situation could see an outcome according to an analyst from Material Indicators. In the past, these events have been linked to similar crises, such as the invasion of Crimea during the Olympics hosted by Russia.
Bitcoin To See Short Squeeze Over Long Weekend?
According to further data provided by Material Indicators, a distribution phase could have been entered by BTC. MI recommended traders to avoid knife catching, especially during periods of low volume, and presented their Trend Precognition indicator which showed a bearish arrow on the daily chart as BTC’s price trend below $40,000.
This could suggest the benchmark could re-test its lows, which could find good support, as MI claimed, in areas of prior consolidation. During the previous sell-off, the levels between $35,000 and $38,000 were relevant and could operate as support.
There are Liquidity gaps on both sides of the BTC/USDT trading pair. The upside or downside could be seen.
There are around $10 million in bids currently. At least in the short term, there seems to be strong support for BTC at that level, which could favor the bulls.
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