Bitcoin (BTC) kept falling lower on Feb. 21 as $38,000 became the latest level to fail the test for bulls.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
$40,000 eyed as BTC relief bounce target
Data from Cointelegraph Markets Pro and TradingView painted a grim picture for BTC/USD Monday, as $38,000 support abruptly vanished after holding throughout the weekend.
#BTC Update 1h TF
First retest of key trendline since reclaim @ $38,5k
Current range $36,6k – $37,8k pic.twitter.com/sjxUv7AGlV
— AN₿ESSA (@Anbessa100) February 21, 2022
While threatening to invalidate analysts’ hopes of a bottom being in, the chances of a rebound to $40,000 were nonetheless good, one argued.
“Not expecting this leg to go very deep tho, should see a bounce towards 40k soon,” Crypto Ed told Twitter followers.
In a video update on the day, Crypto Ed had forecast a multi-leg downtrend continuing, with $40,000 forming the target of a relief bounce before another dive ensued, this even having the potential to take out $30,000.
“If we somehow manage to get back above $40,000 and go up, then I’m bullish; otherwise not,” he concluded, adding that it would take a “miracle” for such a bullish case to come true.
To the downside, a silver lining came in the form of increasing bids at $37,000 appearing on the Binance order book as BTC/USD drifted lower.
Data from monitoring resource Material Indicators further highlighted large transactions staying fairly constant, indicating institutional-grade investors maintaining interest in BTC exposure.
Smaller buyers, however, were in two minds at current levels.
“Some bid liquidity in the $20k range has faded upward to the $30s, but want to see a bigger concentration of bids to get market buyers off hands,” Material Indicators creator Material Scientist added in comments on a chart showing the latest action.
BTC/USD order book data (Binance). Source: Material Indicators/ Twitter
A familiar Chinese tech plunge enters
A Wall Street holiday meanwhile meant a lack of convincing volume on crypto markets Monday, this being apt to exacerbate moves in any direction due to thin liquidity.
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Macro cues, however, continued to flow in, with developments from the Russia-Ukraine conflict primed to unsettle already nervous sentiment.
Reports of deaths on the border came as European stock markets jittered, the FTSE 100 down 0.5% in London and Germany’s DAX down 1.3% on the day.
Another crackdown on tech in China fuelled separate troubles for Asian markets, with Tencent shedding over 6% during trading.
Tencent leads #China tech selloff amid fears of further crackdown. Tencent fell as much as 6.3%. Beijing’s banking watchdog issued warning against illegal fund-raising schemes & an industry association vowed Mon to resist speculative trades in cap mkt. Alibaba dropped 4%. (BBG) pic.twitter.com/OZBDK2Hbyv
— Holger Zschaepitz (@Schuldensuehner) February 21, 2022
The tech stock rout was highly reminiscent of July 2021, the period during which Bitcoin retraced the entirety of its year-to-date gains to bottom at near $29,000.
