First Mover Asia: Bitcoin continues its sluggishness amid darkening economic signs

Market moves

Market moves: Bitcoin's price hovered above $43,000 as investors looked for signs that the cryptocurrency's price had hit a bottom point.

Technician’s take: Support remains intact, which could keep BTC buyers active over the short term.

Prices

Bitcoin (BTC): $43,210 -0.1%

Ether (ETH): $3,359 +0.5%

Markets

S&P 500: $4,662 +.08%

DJIA: $35,911 -0.5%

Nasdaq: $14,893 +0.5%

Gold: $1,817 -0.2%

Market moves

The crypto price slump continues.

Bitcoin spent much of its weekend roughly where it started it, hovering just over $43,000. That level was a little better than at the start of the week, but well off its highs just two months ago. Trading was light as investors looked for signs that bitcoin's downward spiral has reached an end point and that the largest cryptocurrency by market capitalization is ready to enter a new bull cycle. Ether and most other altcoins followed a similar sluggish pattern.

The weekend saw Bitcoin in a choppy zone with no clear trend," BitBull Capital CEO Joe DiPasquale told CoinDesk. "Volumes have also been lacking and Bitcoin's failure to cross $45,000 is a sign of its inherent weakness. When Bitcoin experiences a sharp drop, investors and traders are looking for aggressive buying to confirm a bottom and reversal; however we haven't seen much of that since Bitcoin dropped below $40,000 briefly."

The crypto market's struggles come as the Omicron variant of the COVID-19 virus rages and many businesses struggle with supply chain issues and the increasing cost of raw materials. Last Wednesday the U.S. central bank also reported that inflation had hit 7%, a 40-year high.

DiPasquale does not see Bitcoin's price dramatically rising in the days ahead, although he noted that the next options expiry on Jan. 28 could could serve as a "possible trigger" to send Bitcoin toward $50,000.

Technician's take

Bitcoin daily price chart shows support/resistance with RSI on bottom. (Damanick Dantes/CoinDesk, TradingView)

Bitcoin (BTC) buyers are attempting to reverse a two month-long downtrend. The cryptocurrency declined by roughly 30% from an all-time high near $69,000 in November, and now technical indicators suggest the sell-off is starting to stabilize.

BTC was up about 3% over the past week, although the recent decline in trading volume suggests large price swings could occur.

Support is seen around the $40,000 price level, which could limit pullbacks over the short term. Still, upside could be limited toward the $45,000-$47,000 resistance zone over the weekend.

The relative strength index (RSI) on the daily chart is rising from oversold levels, similar to what occurred in late-September, which preceded a price rally. This time, however, upside momentum is starting to wane on weekly and monthly charts, which lowers the chance of signifiant buying.

Important events

10 a.m. HKT/SGT (2 a.m. UTC): China gross domestic product (Dec. QoQ/YoY).

10 a.m. HKT/SGT (2 a.m. UTC): China industrial production (Dec. YoY).

10 a.m. HKT/SGT (2 a.m. UTC): China retail sales (Dec. YoY).

12 p.m. HKT/SGT (4 a.m. UTC): Japan tertiary industry index (Nov. YoY).

U.S. Martin Luther King holiday.