Bitcoin bulls were thwarted in an attempt to regain support at $40,000 on Monday as revelations about the upcoming executive order and the ongoing conflict in Ukraine tanked the market and dropped BTC to a low of $37,155. At the time of writing, Bitcoin price is changing hands at $38,311.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price dips; trading range could result in sharp price swings
Equities also traded lower amid Russia’s increasing attacks on Ukraine. Talks among U.S. officials of a potential ban on Russian oil imports triggered a surge in energy prices over the past few days. Higher prices at the pump could lead to slower economic growth and lower stock prices.
In crypto markets, Bitcoin price was down 3% over the past 24 hours, compared to a 5% drop in Ether (ETH). Trading volume remains low, and analysts noticed a loss of short-term buying pressure, which could point to the limited upside at prices. Still, sentiment and technical indicators are neutral, which typically precede a pickup in volatility.
“Bitcoin continues to see coins moving off of exchanges while prices are near a 6-month bottom. Interestingly, 21 of the past 26 weeks saw BTC moving more off of exchanges than on to exchanges. Look for major outflow spikes as price rise indicators”, Santiment stated.
Source: Santiment
Bitcoin traded lower over the weekend after buyers could not break above the $40,000 price level. Immediate support is at $37,000, which could stabilize the pullback, although stronger support is seen at $35,000.
The cryptocurrency continues to trade in a tight price range and is down 2% over the past 24 hours to about $38,000. Upside momentum slows down the daily chart, which points to further consolidation around the current price. Resistance is seen at $45,000.
The relative strength index (RSI) on the four-hour chart is rising from oversold levels, similar to what occurred during the last week of February, which preceded a price jump. Still, the RSI can remain in oversold territory for a few days before confirming an upswing (typically with a reading above 50).
“In our full monthly report on the state of crypto, we touch on topics such as the expected surge of war-related topics. Additionally, we look over whale activity for both Bitcoin and Tether to identify where prices go next”, Santiment reported.
Ethereum was changing hands just above $2,500, down 1.7%. Most other significant cryptos were firmly in the red. The third consecutive day of crypto declines started late on Friday as faint hopes for a ceasefire or targeted truce to allow civilians to evacuate besieged cities evaporated.
Sentiment among crypto traders has been bearish throughout the recent price range. The chart below shows the bitcoin Fear & Greed Index, which has remained in “fear” territory over the past three months, which could leave bitcoin vulnerable to volatility shocks. (The index runs from 0 to 100, with “fear” between 0 and 49 and “greed” between 50 and 100.)
Crypto Fear & Greed Index as of March 8 | Source: Alternative.me
The Crypto Fear and Greed Index has once again dipped into the “Extreme Fear” territory. The index has dropped to just 21 points, the lowest level since July.
Some analysts believe that Bitcoin’s recent decline could result in a lengthy consolidation phase. Most digital assets in the market ended the day lower. The overall cryptocurrency market cap now stands at $1.721 trillion, and Bitcoin’s Dominance rate is 42.4%.
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