Blood is shed as the king of crypto, Bitcoin, tumbled, unleashing a cascade of pain for the crypto market. At the time of writing, Bitcoin dropped 4% in the daily period, with the largest loss occurring in the weekly period at nearly 8%.
The coin’s rejection at $24,000 earlier this month may be the reason for this bearish stance from investors. However, there may still be hope for the alpha coin.
Analysts are very optimistic about Bitcoin’s long-term prospects some announcing that BTC will use the $21.5K support as a stepping stone.
Economic problems strengthen the resistance
The broader financial market is gripped by fears of a global recession among corporate CEOs across from wage cuts. In the UK, breaking news shows that the country narrowly missed a recession last year.
However, as the UK is a major player in the European financial market, it has made a breakthrough nonetheless cascade Pain in the European stock market.
In the USA, however, inflation cooled as a result didn’t have an effect public sentiment regarding the looming recession, with the majority still downright pessimistic about the economy.
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Image: Fiber2FashionAlso with something healthy labor market and a falling inflation rate, the dollar is standing still slipped as the Federal Reserve’s recent rate hikes worried investors.
Because bitcoin has some correlation with the broader financial market, the coin can be heavily influenced by macroeconomics over the long term.
Will this correction at $21.7k lead to more pain?
At the time of writing, February 10th, Bitcoin is continuing its move towards $21.5k support, which may or may not hold. If support holds, a long position targeting resistance at $24,000 and above is viable.
However, that can only happen if the bears face a stiff resistance at $21.5k, which could be a major obstacle given the current momentum.
BTC Total Market Cap at $420 Billion on Daily Chart | Chart: TradingView.com
If the bears break the $21.5k support, BTC could reach December 2022 price levels, which would be a major loss for investors. Deteriorating macros and bearish public sentiment will reinforce the bearish decline.
Source: coin jar
For now, short sellers would have a great day in the markets. Accordingly CoinGlass data, short sellers currently slightly outnumber long buyers. This will manifest itself in strong selling pressure and continue to drive the coin’s price lower.
With this in mind, investors and traders should monitor BTC’s price action over the medium to long term before making any meaningful decision.
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