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Bitcoin faced selling pressure on February 21 as the US stock market plunged.
Market data shows that Bitcoin (BTC) price has dropped to a local daily bottom at $24,000. The bearish signals came after BTC was rejected briefly in the latest attempt to break above the $25,000 support.
Amid doubts about whale movement across exchanges, analyst Material Indicators has concluded that BTC needs to topple the 200-week moving average (MA) at $25,100 to support for a change to be possible. its long-term trend.
Meanwhile, KOL Twitter trader Michaël van de Poppe, is bullish on the short-term, confident that the current drop will be temporary.
“The market is correcting, which is great for those looking for entry points. Might go down a bit more before bouncing back up.”
Chart analysis from van de Poppe shows BTC price action working within a narrowing wedge structure, with key support below extending to $22,500.
“The market has seen a slight correction, however I think we will continue towards $35,000-$40,000 before facing a very strong correction that could even bring the price back to $20,000 – $25,000″.
Analyst Inmortal again said that the long participants are going through difficult times. In fact, BTC is currently trading along the resistance area of an ascending wedge.
Additionally, Barchart noted that Bitcoin started selling off after Coinbase’s earnings report. Accordingly, the giant exchange suffered heavy losses and performed slightly worse than analysts’ forecasts.
This underperformance may be related to the recent drop in the US stock market, which was dragged down by disappointing forecasts from Home Depot and concerns that the US Federal Reserve (Fed) will keep interest rates higher for longer periods of time.
Heisenberg forecasts that $30,000 will be the next big test for Bitcoin after the digital currency’s massive plunge in 2022. Many traders are watching to see if it can gain a foothold above current resistance. around $25,000 to see if a continuation towards $30,000 is possible.
The altcoin market also showed signs of correction as BTC moved closer to the $24,000 area.
Leading the decline are Mina (MINA), Curve DAO Token (CRV), Huobi Token (HT), ConFlux (CFX)… all of which have evaporated more than 10% of their value in the last 24 hours. Other projects such as Neo (NEO), Flow (FLOW), The Sandbox (SAND), Polygon (MATIC), Axie Infinity (AXS)… also recorded a decrease of about 8% on the day.
Ethereum (ETH) failed to break above $1,700, after hitting a local top at $1,716, the price turned around, lost more than 4% of its value, and bottomed out on the day at $1,631.
The US stock market fell sharply in the session on Tuesday (February 21) as the fear of higher and longer interest rates continued to weigh on investors’ minds and the latest series of financial reports. of the retail industry raises concerns about the “health” of consumers. Crude oil prices fell more than 1% as optimism about Chinese oil demand failed to overcome concerns about the US economic outlook.
At the close, the Dow Jones fell 697.1 points, or 2.06%, to 33,129.59 points. This was the Dow Jones’ biggest drop since December 15, where the index lost 2.3%.
The S&P 500 index “lost 2%” to 3,997.34 points, marking the biggest drop since the 2.5% drop on December 15. All 11 major S&P 500 industry groups – the broadest measure of stock prices on Wall Street – closed in the red, led by non-essential consumer groups with a drop of 3.3%.
The Nasdaq index slid 2.5% to close at 11,492.3.
Reflecting interest rate concerns, the 10-year US Treasury bond yield rose to 3.9%, while the 2-year US Treasury yield rose to 4.7%. Both of those rates are at highs not seen since November, amid worries among Wall Street traders as the near-term inflation data is hotter than expected. They fear that persistent inflation will cause the US Federal Reserve (Fed) to raise interest rates higher than forecast and keep interest rates high for longer than expected, which could push the economy into recession. .
“I think the stock market has finally understood what the U.S. Treasury market has been saying over the past two weeks. We’ve got a bunch of good economic data. With every good metric, we see US Treasury yields move up a little bit,” said Art Hogan, chief strategist at B. Riley Wealth.
Mr. Hogan added that rather than having a single big factor dragging the market down, the cumulative effect of economic data and the Fed’s message has caught investors’ attention.
“Now the stock market has learned the truth in what Fed officials say means for economic activity, and the statistics mean higher and longer interest rates. . The market is just falling to make up for the part that hasn’t fallen yet,” Hogan added.
Home Depot was the biggest loser in the Dow this session, with a 7% drop after the home decor retailer posted fourth-quarter 2022 earnings that missed expectations. Investors were also disappointed when Home Depot offered a no-growth outlook for revenue this year.
The sharp drop of US stocks dragged global stocks down. The MSCI index of world stocks closed with a loss of 1.59%, while the Stoxx 600 of the European market fell 1% at times before recovering and closing with a loss of 0.19%.
On Wednesday, the Fed will release the minutes of its regular monetary policy meeting on January 31 and February 1. The market awaits this minutes to find more concrete signs on the direction of the Fed’s monetary policy.
In the energy market, Brent crude oil futures in London fell $1.29 per barrel, or 1.5%, to $82.78 per barrel. WTI oil futures in New York fell $0.29/barrel, or 0.38%, to $76.05/barrel.
Concerns about the global economic outlook in general, especially the US economy, when interest rates are likely to continue to tighten in major economies still loomed over investors’ minds.
Even so, oil prices were also supported by signs of supply constraints and increased demand for oil in China as the country reopened. Russia is expected to cut oil production by 500,000 bpd from March, or 5% of the country’s total output. Meanwhile, according to Bloomberg news, China’s imports of Russian oil hit an all-time high in January.
The possibility of the Fed tightening policy further for a longer time also pushed up the USD exchange rate, putting more downward pressure on gold. “This session, oil prices still have to deal with the old worries, that the dollar will strengthen again and interest rates will increase further,” said analyst Phil Flynn of Price Futures Group.
In the virtual currency market, Bitcoin price is stable above the threshold of 24,000 USD. At more than 7am this morning Vietnam time, Bitcoin price according to data from Coinmarketcap.com site stood at $24,442, down 1.5% compared to 24 hours ago, but up more than 10.2% compared to 1 week ago. .
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