February has been a rollercoaster ride for cryptocurrency traders, with market volatility leading to high levels of price uncertainty. Following a strong start to the month, bitcoin prices have since plunged, resulting in a current bear run. However, with just over two weeks left of this short month, what else could be in store for speculators?
Current Market Status
Bitcoin has mostly traded higher this year, boosted by lower levels of inflation, which has in turn prompted the Federal Reserve to hike rates at a slower pace.
Since starting the year trading at a high of $16,621, the world’s largest cryptocurrency by market capitalization added as much as $8,000 to its value, in a four-week period.
However, last week’s rate hike which was a 25 basis point move, was followed up by a significant increase in non-farm payrolls, which confused markets.
Payrolls came in at 517,000 vs expectations of 185,000, leading to many questioning the Fed’s view that we are in a disinflationary cycle.
With macro elements confusing investors, the crypto industry saw more bearish sentiment when the U.S. Securities and Exchange Commission (SEC) cracked down on staking services, adding to the already dismal situation.
Following this, markets have mostly moved lower, with previous bulls consolidating gains from earlier in the month.
As of writing this, BTC/USD is currently trading at $21,690.20, which is its lowest point since January 20.
Looking at the chart, BTC has extended a breakout of a key price floor at $22,500 and seems to be moving towards lower support at $21,200.
BTC/USD – Daily Chart
In addition to this, the 10-day (red) moving average has firmly shifted course and is now nearing a downward cross, with its 25-day (blue) counterpart.
As a result of this downward shift, the 14-day relative strength index now sits at a one-month low at 45.60, and is now nearing the oversold region.
There is a strong possibility that BTC/USD will collide with a floor at $21,200, however, should this point hold, bulls will likely use this as an opportunity to make another run toward the $25,000 mark.
Will bulls reject a breakout below $21,200 this month? Let us know your thoughts in the comments.
Eliman brings an eclectic point of view to market analysis. He was previously a brokerage director and online trading educator. Currently, he acts as a commentator across various asset classes, including Crypto, Stocks and FX, whilst also a startup founder.
Image Credits: Shutterstock, Pixabay, Wiki Commons
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