Cryptocurrencies got beat up over the weekend and continue to remain under pressure as of the time of writing. Bitcoin (BTC) is down -13% on a rolling 7-day basis, and looks to be running right into crucial support.
Fortunately, BTC is still respecting the positive trend established in January and may end up putting in a rather lucrative buying opportunity for the brave traders out there.
The upper trendline is built on a closing price basis and is crucial support to maintain. If the retracement to this level does end up leading to a bounce back to the upside, you very likely may end up getting the opportunity to scalp the lows in the event of a brief spike lower.
Looking at the lower trendline, a resting buy order down near the $37,000 area may get filled if there is one more brief price flush.
Underlying momentum according to the 50/200 Real Motion indicator is still intact and looking to maintain support above its current trend. However, a breakdown of Real Motion below this trend may be confirmation of a bearish future for the crypto market.
If you have a more bearish outlook on the current price action of the crypto market then you really want these trends to hold in order to prevent further downside on a long-term basis.
In the event that the stock market is unable to digest the future rate hikes by the Fed and the impacts of global inflation, the pressures would expectedly beat up cryptocurrencies as well. If current support is lost, BTC risks a selloff down to around $35,000. In a market crash scenario, a selloff to as low as $30,000 isn’t out of the question.
Let’s hope that this doesn’t end up being the case and that the cryptocurrency market and Bitcoin end up bouncing to the upside from here. For now, we’re proceeding with extreme caution and not attempting to catch a falling knife.
**If we discussed a cryptocurrency that you would like to trade but isn’t offered on your current crypto exchange, please see coinmarketcap.com in order to view a profile on any tradable cryptocurrency, as well as a list of exchanges that do offer the coin for trading.**