Bitcoin Sell Violates Key Support Level, Suggest Additional 13% Downside, Technical Analyst Says | Currency News | Financial and business news

[ad_1]

Bitcoin

Nurphoto

Bitcoin’s fall below $ 43,000 violated a key technical support level and suggests more declines to come. A sustained drop below $ 44,200 would put bitcoin’s next support level of $ 37,400 into play, according to Katie Stockton of Fairlead Strategies. So we would make sure outages are confirmed on a back-to-back basis before acting, ”Stockton said. Sign up here for our daily newsletter, 10 things before the opening bell.

Bitcoin’s 7% drop on Wednesday accelerated into a risky move after minutes released by the Federal Reserve suggested a more hawkish Fed, keen to fight inflation with higher interest rates.

According to technical analyst Katie Stockton of Fairlead Strategies, the crypto sell violated a key support level, and another close below that price suggests more declines to come.

With bitcoin trading around $ 43,000 as of early Thursday, the cryptocurrency has a long way to go if it is to return above its key support level of $ 44,200, she said.

Back-to-back closings below this mark would put bitcoin’s next support level into play at $ 37,400, which is a potential 13% drop from the last price. But investors should refrain from taking action for now, Stockton said.

“Support levels are cushions, not specific points, so we’ll make sure outages are confirmed on a back-to-back basis before acting,” she explained in a note to Insider.

But bitcoin’s weakness could last longer than expected as the cryptocurrency has fallen below its 50-day and 200-day moving average in recent weeks, and a potential bearish death cross looks likely in the over the next two weeks. Additionally, bitcoin fell below its 50-week moving average last week for the first time since March 2020.

Nonetheless, Stockton notes that a counter-trend buy signal is likely to flash over the next week, “which would increase the likelihood of an oversold rebound and a successful test of the $ 44,200 support.” . The countertrend signal was about to flash on Wednesday, but the late afternoon bitcoin sell-off prevented it from happening.

“We don’t see this as a setback, but rather as a delay,” she told Insider.

Fairlead strategies

[ad_2]