BTC price action is lower on the day, but strength remains in the short term. It is facing selling pressure as U.S. stocks open lower.
TC/USD 1-hour candlestick chart (Bitstamp). Source: TradingView
BTC price falls along with US stocks
Data from Cointelegraph Markets Pro and TradingView shows BTC/USD falling to a daily low of $24,324 on Bitstamp.
The pair has already shown bearish signs after its latest attempt to break above $25,000 for support was swiftly rejected.
Amid suspicions about the movements of whales on exchanges, monitoring resource Material Indicator concluded that the 200-week moving average (MA) at $25,100 needs to become support for Bitcoin to change its long-term trend.
“IMO, until we see a full candle above the 200 WMA, this is still distribution in a bear market rally, and a bid wall above $24,000, the short-term risk of shorting from this level is about the same as going long,” it wrote in part in a comment in its latest Twitter update.
An accompanying chart of Binance’s order book shows that liquidity is close to spot prices before Wall Street opens.
BTC/USD order book data (Binance). Source: Material Indicators/Twitter
Meanwhile, Caleb Franzen, senior market analyst at Cubic Analytics, was particularly pessimistic about his forecast for the S&P 500 as risk asset performance could still weigh on cryptocurrencies.
“The S&P 500 is opening lower and moving decisively below my $4,080 line,” he concluded alongside the day’s chart.
“A retest of the 200-day moving average is likely, which would be an important support level.”
Annotated chart of the S&P 500. Source: Caleb Franzen/Twitter
At the time of writing, the S&P 500 was down 1.3%, while the Nasdaq Composite was down 1.7%.
The U.S. Dollar Index (DXY), despite its broad negative correlation with stocks and cryptocurrencies, also took a hit at the open, falling to 103.77 before rebounding.
US Dollar Index (DXY) 1-hour candlestick chart. Source: TradingView
“The USD high and low has held at 103.82 for much of February as support for DXY,” trader and strategist James Stanley wrote in part.
Stanley also pointed to the Federal Reserve’s Federal Open Market Committee (FOMC) minutes as a potential market catalyst. The minutes are due on February 22 and reflect the February FOMC meeting, which resulted in the Fed raising its key interest rate by 25 basis points.
BTC price correction “relatively shallow”
Meanwhile, Cointelegraph contributor Michaël van de Poppe, CEO and founder of trading firm Eight, takes an optimistic short-term view, believing that the current decline will be temporary.
Related: Bitcoin activity addresses analyst’s ‘concerns’ despite 50% BTC price surge
"Market correction, which is great for people looking for entry points. Probably a little bit more down from here before we U-turn. Consolidate for a week before continuing," he told Twitter followers.
“Also there are the FOMC minutes tomorrow. Remember, investment wise, Bitcoin is still super cheap.”
Chart analysis by van de Poppe shows that BTC price action is operating within a narrowing wedge structure, with the key support area below extending to $22,500.
The day before, his long-term prediction called for a higher high before a more significant correction, which nonetheless would still likely take Bitcoin back to $20,000.
“The correction is still relatively shallow. I think we’ll continue to rush towards $35-40K and then we’ll have a harsh correction, maybe even to $20-25K. Maximize profits, the higher we come, start allocating USDT to buy into the correction in the second half of 2023,” he wrote.
The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Original link: https://cointelegraph.com/news/bitcoin-can-hit-40k-before-btc-price-sees-harsh-correction-analyst
