After a severe crash in prices, the crypto market managed to recover. Most technical traders managed to perfectly set up their trades as most cryptos reached their respective strong support levels. Bitcoin managed to climb by more than 10%, pushing the entire cryptocurrency market upwards. This is no surprise as Bitcoin’s dominance over the crypto market is still significant, making up 41.5% of the entire market. Why is Bitcoin up? Can you still get on board and buy Bitcoin?
Bitcoin up: BTC soars +10%
After news of the Russian invasion surfaced, the crypto market along with equity markets around the world took a strong hit. Prices of Bitcoin specifically crashed from a high of $39,700 all the way towards $34,300 losing more than 13% in a single day. However, this drop was not entirely justified. It is true that investors tend to liquidate their holdings and substitute their investments into liquid cash. On the other hand, this narrative can be true in Eastern Europe but not in the entire world. The crash was but a mere snowball effect.
The $35,000 price of Bitcoin represents currently a very strong support area. When prices reached this support, prices rebounded higher. In figure 1, we can see how prices even made a fakeout right below the 35K support line, but recovered slightly afterward.
Important Bitcoin Prices 2022
In order to have a better understanding of prices, we need to zoom out and have a look at the macro view. If we zoom out on the daily chart of Bitcoin, we can confirm the 35K support and the resistance of 40K. Earlier in August 2021, prices tended to retrace from the 40K psychological price in either direction.
In fact, Bitcoin technicals always responded well to psychological price levels, with occasional fakeouts. That’s why it is always important not to place narrow stop-losses when trading those psychological areas. Important areas for Q12022:
- $35,000
- $40,000
- $45,000
Will Bitcoin reach its ATH of $67,000 again?
The current fundamentals are a bit negative. However, in a previous article, we highlighted how the current war can make crypto prices crash in the short-term, but recover in the medium/long term. This deduction was taking into account a global pandemic, where we compared what happened to the crypto market when COVID-19 started back in March 2020.
It is a bit too soon to conclude that cryptos already recovered from the Russia/Ukraine war events. But to confirm the trend reversal, we need to see prices break the $45,000 price mark and consolidate around that area.
Failure to breach 45K and prices crashing back towards 33K should be alarming for crypto investors. This move will definitely signal an upcoming crash well below 30K. This is not likely to happen for now, but it is always beneficial to always keep a close eye on the overall cryptocurrency to know when to exit, and more importantly, to know where to enter and profit.
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Rudy Fares
