Bitcoin May Reach $40K Before BTC Price Sees ‘Hard Correction’ – Analyst
Bitcoin (BTC) faced selling pressure at the opening of Wall Street on February 21 as US stock markets opened lower.
BTC price falls with US stocks
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dropping to daily lows of $24,324 on Bitstamp.
Bearish signals were already in for the pair after it saw rapid rejection during its latest attempt to turn $25,000 in support.
Amid suspicions of whale movements on exchanges, monitoring resource material indicators concluded that the 200-week moving average (MA) of $25,100 needed to become support for Bitcoin to change its long-term trend.
“IMO, until we see full candles above the 200 WMA, this is still distribution in a bear market rally, and with the bid wall above $24k, shorting from this level has about as much short-term risk as longing,” it wrote in part. of comments in his last Twitter update.
An accompanying chart of the Binance order book showed liquidity moving closer to the spot price before Wall Street opened.
Caleb Franzen, senior market analyst at Cubic Analytics, meanwhile, had a bearish forecast for the S&P 500 in particular, with risky asset performance still likely to weigh on crypto.
“The S&P 500 is moving lower, trading decisively below my $4,080 line in the sand,” he in summary next to a chart of the day.
“A retest of the cloud of the 200-day moving average is likely, which will be an important support level.”
The S&P 500 was down 1.3% at the time of writing, while the Nasdaq Composite Index was 1.7% lower.
The US dollar index (DXY), despite being largely inversely correlated with stocks and cryptos, also took a hit at the open, falling to 103.77 before retreating.
“USD higher highs and lows have held through much of February 103.82 as support in DXY, current higher-low,” part of commentary from trader and statesman James Stanley read.
Stanley additionally noted the minutes of the Federal Reserve’s Federal Open Market Committee (FOMC) as a potential market catalyst. Due on February 22, the minutes reflect the FOMC meeting in February, as a result of which the Fed raised its key interest rate by 25 basis points.
BTC Price Corrections ‘Relatively Shallow’
Adopting an optimistic short-term view, Cointelegraph contributor Michaël van de Poppe, CEO and founder of trading firm Eight, was confident that the current downturn would be temporary.
Related: Bitcoin Active Addresses ‘Worried Analyst’ Despite 50% BTC Price Gains
“Market correction, which is great for people looking for entry points. Could go down a bit more from here before we turn. Week of consolidation before continuation,” he told Twitter followers.
“FOMC minutes tomorrow too. Remember investment wise, still super cheap for Bitcoin.”
Chart analysis from Van de Poppe showed BTC price action operating within a narrowing wedge structure, with a key area of support below extending to $22,500.
The day before, his long-term forecast called for higher highs before a more significant correction, this nevertheless suitable to take Bitcoin back to $20,000.
“Corrections remain relatively shallow. I think we will continue the run towards $35-40K before we get a tough correction, maybe even to $20-25K. Maximize profits, start allocating towards $USDT the higher we go, buy on the correction in the second half of 2023,” he wrote.
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
