The crypto market has slumped in the last few days. Bitcoin (BTC) has in fact dropped for four consecutive days now despite threatening to return to $50,000 in recent days. But is this downtrend temporary, and how far can it go? Well, here are some highlights first.
The weakness came as China reaffirmed its commitment to crack down on crypto.
Increased volatility due to the war in Europe is also a big risk factor.
Bitcoin (BTC) is likely to fall to $35,000 before finding enough demand to rise again.
Data Source: Tradingview
Bitcoin (BTC) – What to watch next?
From a technical analysis point of view, the most important thing to watch right now is the $35,000 support. This price has proved very resilient in recent weeks, and it is likely BTC will hold above it. At press time, the mega-cap coin was trading at $38,800.
If we see increased bear pressure that pushes the coin below $35,000, the next support zone will be $32,000. There are also some additional fundamental factors to watch. The crypto crackdown in China is the main thing, but most investors were expecting it. The war in Europe however has escalated fast and could trigger more volatility in the market in the near term.
But if BTC can somehow pull up above $40,000 and keep the price action there, then we may see some positive moves in the coming week.
Why This Is the Right Time to Buy BTC?
Bitcoin (BTC) has declined quite substantially from its all-time highs. There are in fact, warnings that the coin could fall further during the first quarter of the year. But the long-term outlook for the mega-cap still remains very positive. In that case, the price pullback we have seen so far in 2022 offers the ideal opportunity to get in.
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