Rollercoaster start to the week
It’s been an awful couple of months for Bitcoin, plunging more than 50% from its highs and looking extremely vulnerable to further losses.
What started as a correction in the cryptocurrency has morphed into part of a broader sell-off that’s pummelled bitcoin along with other risk assets. The concerning thing for Bitcoin is that there is still plenty of anxiety in the markets and it is not far away from a massive support level .
Some may be encouraged by the rebound in the second half of today’s session but it’s still early days. Risk assets have taken a beating and this rebound only erases a small portion.
What’s more, prior to the rebound there was still plenty of momentum in the sell-off, as you can see on the 4-hour chart. What will be telling is how the momentum indicators react to the next move lower.
In the meantime, the rebound brings some relief. But I’m not sure the anxiety in the markets has passed. There’s a lot to come this week that will influence risk appetite – the Fed on Wednesday, tech earnings, developments in Ukraine.
By the end of the week, we should have a much better grasp of whether the worst is behind us or there’s more pain to come. In the interim, the key level is $30,000. A major barrier of support for the last 12 months and if that falls, things could get much worse and fast.