Bitcoin (BTC) after the Massive Weekend Dip – Price Analysis
- Bitcoin saw its value crashing during the weekend.
- The plummets came after NASDAQ 100 index declined by over 300 points
- Here is what you might expect from Bitcoin this week.
Bitcoin (BTC/USD) suffered a massive hit over the weekend amid various concerns. The leading crypto by market dominance fell towards $42,000, touching its lowest value since 1 October. Moreover, the bottom had BTC 40% away from its ATH.
Why did Bitcoin Drop?
There are multiple reasons why Bitcoin prices plunged over the past sessions. First and foremost, Bitcoin’s impressive performance this year attracted profit-booking as investors enjoyed more than double returns this year. That had some market players exiting trades.
The combative Fed Reserve’s statement last week contributed to Bitcoin’s slump. While testifying to Congress, Powell commented on Omicron COVID strain and the bank’s reaction to the virus. He highlighted that Fed would fasten the ‘tapering’ pace.
The Fed influences all asset classes and BTC, considered a risky asset, is not an exception. With that, the war-like tone affects the coin’s performance. True enough, the stock saw a sharp decline on Friday. That came after the NASDAQ 100 index lost nearly 300 points.
Thirdly, BTC prices fell due to the heavily leveraged derivatives winding down. Indeed, there has been a massive sell order that may have catalyzed the market crash. Leveraged derivatives allow crypto investors to utilize futures contracts to predict crypto price movements. With them, investors also invest less more for supersized profits.
Meanwhile, is it about time to purchase the dip? Indeed, no one knows when the BTC price will rebound. However, El Salvador is among the enthusiasts that believe the currency will rebound. Over the weekend, the nation purchased 150 $BTC, with $48,670 as an average price.
BTC Price Analysis
According to the daily price chart, BTC has retained massive bearishness lately. Meanwhile, the sell-off began when BTC surged to ATHs near $60,000. Historically, BTC struggles after touching a critical resistance zone.
For now, the price dipped beneath the 50-day MA. BTC hovers at 200-day MA as the Relative Strength Index dropped. That way, Bitcoin might continue with bearish movements, targeting the crucial support of $39,722. Meanwhile, let us see what the incoming trading sessions will comprise.