The second half of last week was very successful for Bitcoinю Unexpectedly for many, the BTC/USD pair not only returned above the level of $38000 but also rose above the psychological level of $40000 without any problems. The BTC/USD pair did not stop there and continued its bullish rally. As a result, the pair rose and consolidated above $42000. At the time of publication, the BTC/USD pair is trading in the area of 42700.
What affects the price of Bitcoin
Of course, the return of the price of Bitcoin above $40000 came as a surprise to many. At the time when most expected a deepening bearish correction, market participants saw a completely different situation. What has become the new Bitcoin price driver?
News about the coronavirus and expectations of the results of the Fed meeting, as well as the publication of data, are pushing the price of Bitcoin in one direction or another. On February 4, we saw disappointing data on unemployment in the US. They helped the price of Bitcoin return above $40000. The potential conflict between Russia and Ukraine continues to be of concern to crypto investors.
We also see an increase in the correlation between the price of Bitcoin and the S&P 500 index. Accordingly, it is worth paying attention to stocks when predicting Bitcoin prices. Market analysts say that Bitcoin and cryptocurrencies in general have moved closer to risky assets such as tech stocks.
How about technical analysis
As we wrote earlier, for a bullish trend to form, BTC/USD needs to close daily above 40000. It happened. Thanks to the growth of the BTC/USD pair, it was able to leave the downward price channel that had been forming since November last year. Also, the pair was able to return above 100MA. The pair even managed to reach a high of 43067. Now it is important for the BTC/USD pair to stay above the level of 42650 in order not to lose potential and continue moving towards the resistance level of 43000. If the pair manages to overcome it, we will see a move to the area of 43200.
A drop below 42650 could lead to a downward correction. In this case, the BTC/USD pair will receive support in the area of 41500-41300. A move below this level will send the pair to the psychological support area near 40000.