Bitcoin: Is the worst priced in?

Bitcoin (BTC) price has been falling back to the lower levels from the summer of 2021. In just a week, BTC price has lost nearly 25% of market value and has hit firm support at $29,927.50, where bulls are more than happy to pick up BTC price at a considerable discount sub $30,000. Expect a rebound in the Bitcoin price action as the Relative Strength Index (RSI) and the markets calm down, and in the process create mild tailwinds for cryptocurrencies.

BTC price to rally back 25%

Bitcoin price has been facing plenty of headwinds with the sell-off in the equity markets, the FED stumbling over delivering a clear message and the legal crackdown of the US on cryptocurrencies. Investors were wary of investing given such risks, which dried up the buy-side demand, resulting in a sell-off since last week. With the dollar index starting to flatline and equity markets storming out of the gate today, cryptocurrencies are set to be dragged higher too, helped by the RSI which is trading in oversold and will trigger more demand volume on the buy-side as the bears look to lock in gains. 

BTC price is thus on the cusp of a decompression phase without talking about starting an uptrend. That last element depends on too many tail risks that are still dragging Bitcoin to the bottom of the ocean, with another breach sub $30,000 possible. But for the coming days, look out for uplifted price action, with BTC first popping above $31,584.75 and next running up towards $36,709, booking 25% gains in the process.

BTC/USD daily chart

It is no secret anymore that cryptocurrencies are correlated to the daily moves in financial markets. Given the dollar’s strength and persistent weakness in equities, many investors may be put off staying in cryptocurrencies and probably don’t now expect big profits. BTC price could still easily suffer a massive sell-off, breaking below $29,927.50 and opening up room to drop towards $28,695.13 in the near term.