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Bitcoin price arrives at crucial support after day of declines

2 17

The bitcoin (BTC) price has had a pretty red day! After a second attempt to break the price zone near $44,000 failed, the price has come to a rather crucial point after a brief decline.

Bitcoin price has reached an important point

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Looking at today’s price developments, we see BTC falling more than 4% in value in a downward trend. At the time of writing, the bitcoin price on Coinbase stands at $42,031. The Bitvavo bitcoin price is now €37,000.

The daily chart shows that after today’s decline, bitcoin has arrived at the 50-day moving average (MA). BTC broke above this again on February 8 for the first time since November 2021. Unfortunately, this did not lead to an explosive increase. On February 13, the 50-MA was tested as support and appeared to hold up. But right now, after a short bounce, bitcoin has finally arrived at this point again.

Here we also find the centerline of the Bollinger Bands. This, coupled with bitcoin’s past price action, makes the zone at $42,000 very important to keep an eye on in the coming period.

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Good and bad bitcoin news

Today’s move comes as Ukraine has legalized bitcoin and crypto, according to Blockworks. This is not about rebranding crypto as legal tender, but about officially regulating digital assets. This is usually a positive sign for the adoption.

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However, there is also some less good news for bitcoin. At least, it just depends on how you look at it. Michael Every of Rabobank writes in a contribution to Zerohedge that the American central bank, the Fed, has no idea at all how to deal with inflation. It therefore remains uncertain what the Fed will do in the near future. This can have a major impact on the price of bitcoin.

“All the Fed’s choices are bad. There is no oasis ahead, as markets like to believe. There is no Fed ‘master plan’ to stop inflation without stopping the asset price appreciation we’ve built markets on for decades.”

 

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