Bitcoin Falls to Six-Week Low Amid Risk-Off Sentiment
Bitcoin’s (BTC) price is once trending low as the ever-increasing list of macroeconomic worries looms over traditional risk assets. Bitcoin is the world’s first decentralized cryptocurrency. It was created in 2009 by an unknown person or group of people using the pseudonym Satoshi Nakamoto. Bitcoin is often referred to as a digital or virtual currency.
At press time, the number one cryptocurrency in the world is trading at $38,880, the lowest since March 15 and down nearly 3% in 24-hours, according to CoinDesk data. The number 2 cryptocurrency, Ethereum also slumped about 4.5% to $2,799, its lowest price since March 17.
The global equity markets are a sea of red, with European stocks hovering at one-month lows and the futures tied to the S&P 500 nursing a 0.7% drop. Commodities also faced heavy losses, ending their recent resilience. Gold, a traditional safe haven and inflation hedge, fell nearly 1% to $1,917 per ounce.
The risk-off mood in the markets is being attributed to multiple factors, including inflation worries, tapering concerns, and of course COVID-19 consequences in several countries. Bitcoin’s price is at a six-week low as the risk-off mood gathers momentum.
The U.S. dollar is the only asset to increase in price. The DXY dollar index, which tracks the greenback against a basket of its peers, rose 0.25% to 101.48. This is the first time the index is topping 101 since March 2020.
Price charts show that further price declines are on the cards for bitcoin, according to technical analysts. BTC/USD fell below the 200-day moving average support earlier and is currently trading at $38,880. The pair may test the next key support near the $35,000 level in the near term.
“Bitcoin looks to be breaking a pivotal minor two-month trend on Friday’s pullback that likely causes weakness down to test January lows,” according to Mark Newton, who is a technical strategist at Fundstrat. “but breaks of that level should lead to a full retest of $32,950 without too much trouble.”
The overall cryptocurrency market capitalization plunged by %2.2 to $1.80 trillion earlier today and is currently correcting higher. Ethereum’s market fell by %2.6 to $345 billion and XRP’s market cap tumbled down 5% to $32 billion.
The sentiments from the crypto community on Twitter are mostly bearish. Most community members are worried about an impending flag breakdown on bitcoin’s technical chart, a bearish pattern that would supposedly open doors for $20,000.
According to, Matthew Dibb, COO, and co-founder of Stack Funds, “We could potentially see BTC drift as low as $33,000 if macro sentiment further weakens. We have observed consistent selling in line with the downside of the Nasdaq during Friday’s trade. We expect this to continue in the near term and trade tightly with equities.”
The price of bitcoin will continue to be mainly decided by increased user adoption and network usage, but another factor is gaining relevance which is the macro connections.
The jury is out on where bitcoin would bottom out once the hysteria fades.
I am a bitcoin and crypto currency writer. I also work as a professional trader, and I have experience with stock trading and bitcoin trading. In my work, I aim to provide clear and concise information that helps people understand these complex topics.
