To the sound of war drums between Russia and Ukraine, Bitcoin continued its downward spiral on Monday. Over the weekend, the digital currency par excellence lost crucial support below $40,000, and on Monday, it made a low below the next control zone at $37,000. Despite closing near $38,000, the crypto currency is swinging around the aforementioned crucial support, according to TradingView data, and threatens to extend its losses.
Bitcoin’s price has dropped for six days in a row. Late last night, the pioneer fell to $36,545 — its lowest level in two weeks. This is around 45 percent lower than the all-time high set in November.
BTC/USD trades at $37k. Source: TradingView
Sentiment Shift Extreme Fear
Experts, on the other hand, are becoming pessimistic after the digital currency fell sharply after failing to break through the $45,000 resistance barrier, and many anticipate that the $30,000 level will be reintroduced.
It’s understandable that investors are concerned, given how crypto values have fluctuated in recent months. The Federal Reserve’s decision to scale back on pandemic-related economic stimulus measures, as well as mining difficulties in Kazakhstan, initially weighed on prices. However, most cryptos have struggled to regain any traction.
Bitcoin Fear and greed index.
The index serve as a good indicator of investor sentiment. It considers a variety of indicators, including as trade volumes, social media activity, and volatility. The market scored 84 in November, when prices were at all-time highs, putting it in severe greed territory.
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Bloomberg Analyst Optimistic
Mike McGlone, a senior commodity strategist at Bloomberg, has an intriguing prediction for Bitcoin. McGlone had already tweeted on Sunday, February 20, that Bitcoin could suffer significant headwinds in the near future. He goes on to say that inflation won’t go down unless risk assets fall, which hasn’t happened yet.
Despite the grim short-term forecast, McGlone believes Bitcoin is on the verge of establishing a new trend. McGlone also stated that a majority of assets will respond to the “ebbing tide” in 2020, as the Fed’s financial tighten policies.
However, as inflation tightens its grip, McGlone predicts Bitcoin will reach a key milestone in 2022. Last Sunday, the Bloomberg analyst wrote on Twitter, ”
Bitcoin indicating a rough week ahead – Inflation Unlikely to Drop Unless Risk Assets Do: Most assets are subject to the ebbing tide in 2022, on the inevitable reversion of the greatest inflation measures in four decades, but this year may mark another milestone for Bitcoin.
McGlone previously said that Bitcoin has shown divergent strength as compared to equities. BTC is expected to reach $100,000 in 2022, according to Bloomberg’s Crypto Market Outlook for February. McGlone is positive on Ethereum (ETH) and stablecoins, commonly known as “crypto dollars,” in addition to Bitcoin.
Price prediction when it comes to Bitcoin has always been measured and conflicting. Some analysts are advising investors to purchase the drop in the hope of seeing the pioneer cryptocurrency reach $100,000 this year. Others are anticipating a crypto winter, with the price plummeting to zero.
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Featured image from Unsplash, chart from TradingView.com