Bitcoin is trying to find some love before Valentine’s Day
Blood is spilled as the king of crypto, Bitcoin, faltered, starting a cascade of pain for the crypto market. At the time of writing, Bitcoin has gone down 4% in the daily time frame, with the biggest loss of the week at almost 8%.
The coin’s rejection of $24k earlier this month could be the reason for this bearish attitude from investors. However, there may still be hope for the alpha coin.
Analysts are very bullish on the long-term outlook for Bitcoin, with some suggesting that BTC will make the $21.5k support a springboard.
Economic misery strengthens the resistance
The wider financial market is gripped by fears of a global recession with CEOs facing pay cut. In the UK, breaking news shows that the country narrowly missed a recession last year.
But with the UK being a major player in the European financial market, it still set one off cascade pain in the European stock market.
In the US, inflation cooled, but this has not affected public sentiment in the form of the looming recession, with the majority still completely pessimistic about the economy.
Image: Fibre2Fashion
Even with a something healthy the labor market and a falling inflation rate, the dollar still slipped as the US central bank’s latest interest rate hikes worried investors.
With Bitcoin having some correlation with the broader financial market, the coin can be heavily influenced by macroeconomics in the long term.
Will this correction bring more pain to $21.7k?
At the time of writing, on February 10, Bitcoin continues its path towards $21.5k support which may or may not hold. In case the support holds, a long position targeting resistance at $24k and above is possible.
However, this can only happen if the bears face strong resistance at $21.5k which, in the current momentum, could be a major obstacle.
BTC total market cap at $420 billion on the daily chart | Chart: TradingView.com
If the bears break through $21.5k support, BTC could see December 2022 price levels which would be a big loss for investors. Deteriorating macros and pessimistic public sentiment will reinforce the bearish decline.
Source: Coinglass
For now, short sellers will have a field day in the markets. In accordance CoinGlass data, short sellers currently outnumber long buyers by a small margin. This will manifest as strong selling pressure, further driving the price of the coin down.
With this in mind, investors and traders should watch BTC’s price movement in the medium to long term before making a significant decision.
Featured image from Axcet HR Solutions
