And again, the cryptocurrency market is in the red zone. For the first time in a month, the price of Bitcoin dropped below $40000, pulling the entire market with it. After several days of gradual decline, the BTC price broke down the psychological mark of $40000 and reached a low of 39218.
After reaching the low, the price corrected slightly upwards. At the time of publication, the BTC/USD pair has returned above 40000 and is trading around the level of 40200.
The main factors behind the decline in the price of Bitcoin are the increase in the interest rate in the United States, the growth of inflation, as well as the disruption of world trade due to Russia’s attack on Ukraine. As a result of the downward pressure on stocks and risk assets, Bitcoin is losing its attractiveness among investors.
On the 4-hour chart, the BTC/USD pair fell below the moving average. To begin recovery, the BTC/USD pair needs to return above 41000. The pair must overcome this level and hold above it. Further, the BTC/USD pair will meet with resistance of around 42000.
On the other hand, if the BTC/USD pair falls below 40000 again, we will see a sharp decline to the area of the previous support of 39500. A move below this level will send the pair to the level of 38500.