Bitcoin price drop, will BTC / USD find support at $ 42k?
After the turbulence of the first half of the week, the price of Bitcoin remains stable, trying to get rid of the bears and re-instill confidence in buyers.
As it is, the path of least resistance is still south, with bears in the driver's seat despite the optimism.
On the daily chart, the price of BTC is in waist-deep red in the last week of trading.
During this time, the currency is down 10 percent, and the bulls failed to quell fears of further losses from a technical perspective.
The FED will keep rates low, the labor market is weak
Still, the fundamentals are firm.
It is understandable. The US Fed, through its president, believes that the economy will take longer to return to pre-coronavirus levels.
Accompanied by fears of higher consumer prices and weaker-than-expected labor markets, fundamentals could pull the USD bulls down the ladder.
In return, safe-haven assets, notably Bitcoin, may attract more funds from investors moving away from fiat money.
Expectations of rising inflation and more government borrowing have already seen bond yields rise to new two-year highs.
MicroStrategy and Square buy more Bitcoin
At the same time, MicroStrategy and Square are doubling down on Bitcoin, buying more than $ 1.177 billion in the coin.
Both are public companies that comply with SEC rules. They are buying Bitcoin to fight inflation, making digital gold a big part of their investment strategy. MicroStrategy CEO Michael Saylor said inflation would hit 10 percent in the next few years.
Consequently, your investment is a huge boost for BTC, a hallmark of legitimacy.
Bitcoin price analysis
The BTC / USD price is bearish against the dollar.
On the daily chart, the path of least resistance remains to the south, at least for the immediate term, despite bullish optimists.
Support is at the middle BB and Feb 23 lows at around $ 44.5k.
However, heavy losses towards $ 42k (January 2021 highs) may pour cold water on this uptrend. If prices find support at $ 42k and a confirmed bull bar with higher volume impressions, the BTC / USD price may rebound to $ 58k in the uptrend continuation pattern.
On the other hand, if prices drop to $ 42k, with equally high trading volumes, traders will not rule out the possibility that Bitcoin's price will halve from the peaks at $ 30k.
Graphic courtesy of Trading View
Disclaimer: The opinions expressed are not investment advice. Do your research.
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