In line with Monday’s analysts’ predictions for Bitcoin’s price action should it fall below $40,000, Bitcoin is now gearing up for a short-term Bullish reversal from the five-month all-time low of $39,000 it hit yesterday on Tuesday.
In the early hours of Monday, analysts predictions leverages on Bitcoin’s price chart small moving average (SMA) indicator at the beginning of the week. Famous analyst Justin McQueen in his report, utilized the 50-day and 200-day moving average to analyze and predict possible price action of Bitcoin.
According to McQueen on Monday, BTC’s poor price action that it has fielded since the start of the year can be attributed partly to the strong selling pull that the token experienced in transit to 2022. Statistics showed that investors had lost over 17% of their portfolio due to BTC’s sloping downward trend in the first ten days of January; accordingly, the downward trend will likely continue until a reversal action by the crypto.
Bitcoin Continues To Dip
True to predictions, the mother of all coins, Bitcoin continued to dip hours after the market opened globally, and the weekend predictions were published, BTC dropped below $40,000 for the first time since September 17 last year, to trade at just above $39,000. The five-month all-time low falls just slightly above the monthly S1 support level and its long-term descending trendline drawn from November last year.
According to McQueen, the dip below $40,000 to a five-month all-time low will serve as a strong reversal push for BTC’s price action; he noted that the crypto market globally is showing signs of an overall reversal with various indicators showing a slow but gradual market-wide correction to an upward trend.
Further analysis of BTC price movement showed that the possible reversal region would be the $39,800 price region, a point of inflection that will support BTC to recover as much as 20% price value in the short term.
Bitcoin Stays True To Predictions
Bitcoin didn’t disappoint as it has stated on track concerning predictions, the pessimism in the community has diminished somewhat, as several on-chain analytics report a significant reduction in selling pull, indicating that medium and long term investors are beginning to HODL their BTC tokens anew.
The observed price dip has effectively stopped in its tracks; signs of consolidation and a reversal are coming up around the predicted $39,800 region. It is all but certain that the other coin will now embark on a short-term bull run up to $45,000, possibly reaching 47-48k, before further price decisions will be made according to market conditions then. Meanwhile, analysts have warned that should BTC close below 39k today, these optimistic projections might become obsolete.
US Dollar Struggles Amidst Powell’s Congress Testimony
The United States fiat currency, the USD, is currently struggling in the forex market as it failed to move above the 96-point mark despite the overall bullish trend the Forex market globally fielded this week. The USD has failed to leverage the market-wide null run to increase price value significantly; this comes in the period of Fed Chair Powell’s testimony in the US Congress.
The Citi indicator for forex trade is weakening significantly for the USD, and this is an indicator of weakening economic power and loss of expectations concerning the currency pairs in the Forex market. The rise of Treasury yields has exposed the country’s tech stocks to unfavourable conditions, resulting in the underperformance of its international counterparts.
Jerome Powell, chair Federal Reserve of the United States, in his testimony, stated that the Federal Reserve would utilize its full contingency of policy to avoid the entrenching of higher inflation in the economy, citing the rapid expansion of the country’s economy, a pace he noted that was marginally higher than the growth in the expired decade.