Bitcoin ( BTC ) slipped back to $40,000 for the first time in several weeks this Friday. Is the psychologically important brand now threatening to collapse?
Crypto experts are mostly giving the all-clear as despite the downturn, the prevailing price range is still intact.
"Moment of Truth"
Yesterday, Thursday, the uncertain situation in world politics and on the financial markets had already contributed to BTC/USD losing noticeably . That trend continues on Feb. 18 as crypto exchange Bitstamp has since dropped as low as $40,330 for the market-leading cryptocurrency, data from Cointelegraph Markets Pro and TradingView shows.
A subsequent upswing allowed the price to improve again to 41,000 US dollars, but uncertainty continues to prevail.
The good news is that $38,000 is the next major support, so even a drop below $40,000 is unlikely to result in a drastic crash. However, this mark (38,000 US dollars) has to be defended in order not to risk a more violent descent.
“This is the moment of truth,” as trader Credible Crypto appropriately warns . To which he adds, referring to the stock chart below:
“The low is established, if $32,000 is indeed our bottom then we need to defend the green zone to avoid crashing. I assume that we will succeed and then we can climb up again.”
However, other crypto experts are far less bullish after the dip to $40,000.
As trader Crypto Ed puts it : "We are desperately holding on to the $40,000 mark, but I need a real miracle after yesterday's downturn."
The current structure in the derivatives markets supports the thesis that the bottom was formed at $32,000. As analyst Dylan LeClair explains, many investors entered the market at this mark in January, which is why this area is also of great psychological importance.
“The speculative air in the bitcoin derivatives market is more or less out, with the majority of investors buying in the bitcoin market at $33,000 in early January,” as the expert notes in this context .
While some of his peers are now bearish on the short-term, LeClair counters that not much has changed in the medium-term and the market-leading cryptocurrency is still within its projected path for the current four-year cycle.
“Quite apart from the macro situation, bitcoin performance continues as expected. Despite all the uncertainty, Bitcoin is moving in a stable price range significantly higher than it was in the last cycle. Don't lose sight of the big picture," says the analyst.
"Just background noise"
Jurrien Timmer, director of macroeconomic observation at asset manager Fidelity, also points to the network's steady growth over the past few years, which he says is more telling than mere price action.
“Bitcoin has been in a choppy range for almost a year now, bouncing around the $30,000 to $65,000 range. The debate about uptrends and downtrends is becoming a hobby for some, but really it's just noise. Network growth is what really counts,” as Timmer points out .
The financial expert sees the long-term development of Bitcoin similar to that of Apple from the 90s to today.
The journey to the much-touted $1 million mark could be correspondingly slow and arduous, but as long as the Bitcoin network is growing steadily, the foundation stone has been laid.
The fact that this is indeed already successful can be seen, among other things, from the fact that the hash rate of the crypto market leader recently reached a new record high .
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