Bitcoin price opened February higher, China’s crypto community remains active after all
Bitcoin price started February, a seasonally strong month for speculative assets, in green, as investors seemed ready to increase their exposure to risk assets. At the time of publication, the oldest cryptocurrency was trading at a little below $38,546, up about 1% over the past 24 hours.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price rangebound near support; resistance at $40,000 – $43,000
Cryptocurrencies are starting to stabilize after falling in January, and some analysts expect prices to recover this month, especially as several altcoins outperformed bitcoin over the past week.
Bitcoin was roughly flat over the past 24 hours, versus a 2% gain in Ether (ETH) and a 10% gain in Solana (SOL) over the same period. Metaverse tokens such as Decentraland (MANA) and The Sandbox (SAND) failed to sustain Monday’s rally as both tokens declined as much as 5% over the past 24 hours.
Analysts expect regulatory headwinds to fade over the short term, boosting investor sentiment. For example, the crypto Fear & Greed Index is rising from extreme lows, indicating more bullish activity. And in the Bitcoin futures market, there are signs of a pending short squeeze, which occurs when prices unexpectedly rise, forcing short sellers to exit positions. Technical indicators suggest a possible rise in BTC could be limited at the $40,000-$45,000 range as long-term momentum weakens.
The crypto Fear & Greed Index rose from “extreme fear” territory last week, which means bearish sentiment has started to fade. The index is now near its July 2020 lows, which preceded a recovery in crypto prices.
Crypto Fear & Greed Index as of February 2 | Source: Alternative.me
Bitcoin holds support above $37,000, albeit within a narrow trading range. Buyers will need to make a decisive move above the $40,000 resistance level to pause the intermediate-term downtrend from November.
For now, the Relative Strength Index (RSI) on the four-hour chart is approaching overbought territory, which typically precedes a brief pullback in price. Additionally, the downward sloping 100-period moving average on the four-hour chart could limit price gains over the short term. However, on the daily chart, the RSI continues to rise from oversold levels, which means buyers could remain active above the $35,000-$37,000 support zone. The wide range of support suggests sideways trading could persist this week, especially given weak momentum on longer-term charts.
Ether, the second-biggest cryptocurrency by market capitalization, was up to $2,767, a more than 4% gain over the same time. The overall cryptocurrency market cap stands at $1.769 trillion, and Bitcoin Dominance is 41.2%.
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