Bitcoin (BTC) starts a new week with a decidedly bearish move — but one which fails to shake investor confidence in the bull run.
A mixed weekend saw BTC/USD close above $47,000, only to lose all of its previous gains to challenge $45,000 support hours later.
It’s a delicate situation — not just Bitcoin, but stocks and sentiment are taking a beating as the Evergrande implosion in China unravels. What could affect the cryptocurrency market?
As analysts expect a “choppy” week for BTC price action, Cointelegraph takes a look at five factors worth considering when charting where Bitcoin might be headed in the short term.
El Salvador “buys the dip”
Bitcoin spot price action is hardly inspiring for traders as the week begins.
A reversal of previous strength on Sunday was compounded overnight, and BTC/USD lost the $46,000 mark.
Amid turmoil in traditional markets, headed by the Evergrande saga in China, this week may well not end up offering profitable trades. For popular trader Pentoshi, now is the time to take stock and wait for the situation to resolve itself.
Im def spot long. I’m bullish. Said it the last week. I think this week will be noisy. Lacking a lot of info. I think we could go as low as 41k but IMO we are going to 56-58 and thus just chilling in spot
— Pent◎shi Wont DM You (@Pentosh1) September 20, 2021
As Cointelegraph reported, $44,000 represents a support wall which Bitcoin now looks set to retest. A deeper dive could yet yield $41,000 or even $38,000, the latter forming a key Fibonacci retracement level.
Overall, however, the mood remains firmly in favor of upside returning across cryptocurrency markets into Q4.
Among those “buying the dip,” meanwhile, is the government of El Salvador, which on Monday confirmed that it had purchased another 150 BTC for total holdings of 700 BTC.
Bitcoin is holding up “like an absolute champ”
It’s a tough environment out there, and all things considered, Bitcoin is performing much better than expected, analysts say.
Whether it’s stocks or safe haven gold, the picture is decidedly less rosy this week. The S&P 500, for example, is on track to close below its 50-day moving average for the first time since June.
Gold is heading towards its lows from April, while against the Nasdaq 100 Index, veteran trader Peter Brandt notes, the precious metal is almost at lows from 20 years ago.
— Peter Brandt (@PeterLBrandt) September 18, 2021
“Given the dollar rise (it’s near cycle high), weakness in Stocks, plunge in metals, BTC is acting like a absolute champ as it rejects notion of moving into a deep Cycle Low. Relatively v.strong,” trader, entrepreneur and investor Bob Lukas wrote in a recent summary of the situation.
Should the status quo begin to change, the impetus for BTC to perform much more strongly is therefore clearly in place.
Bitcoin prepares first 5 straight difficulty increases since 2019
Bitcoin fundamentals have never looked better — a cliche, perhaps, but this week, the numbers speak for themselves.
The mining difficulty, which has been tempering the impact of May’s Chinese mining rout for months, is now due to put in its fifth consecutive increase on Tuesday.
This is a rare event — the last time that difficulty increased…