Bitcoin Price Analysis: BTC/USD Breaches 40K on Global Risk Aversion
Bitcoin (BTC/USD) Analysis:
- Robinhood rolls out crypto wallet and El Salvador to provide crypto loans to SMEs
- Bitcoin and other cryptos plunge below 40k as global risk sentiment sours
- Bitcoin (BTC/USD) key technical levels analyzed
El Salvador’s Crypto Loans and Robinhood to Offer Crypto Wallets
In other news, El Salvador’s National Commission for Micro and Small Enterprises (Conamype) communicated its plans to offer Small and Medium Enterprises (SMEs) $10m in crypto-based loans in Q1 of 2022. It’s been reported that 86% of businesses in El Salvador operate on an informal basis without access to banking services. The new crypto loans are said to charge up to 10% in interest which is significantly lower than alternative finance charges currently.
Additionally, Robinhood is set to offer crypto wallets to 1,000 customers from a waiting list to test the new, unreleased version of the product. The waitlist is reported to boast more than a million users with access to the wallet set to be expanded to 10,000 clients in March due to popular interest.
Cryptos Continue Lower but with Greater Impetus
The top cryptocurrencies, measured by market capitalization, continued the larger sell-off but with greater vigor, during the Asian session.
Top 10 Cryptocurrencies, Highlighting 24 Hour Declines
A major source of not only the crypto decline but also the wider global sell-off can be attributed to the ongoing talks between Russia and the US.
US Russia Talks Resume Today – Global Risk Impact Likely
Today, top US and Russian diplomats are due to meet in Geneva in an attempt to solve the current impasse of last week’s crucial talks – the result of which is likely to have an impact on global risk assets, which includes Bitcoin.
Bitcoin (BTC/USD) Analysis and Key Technical Levels
Bitcoin began the year around the 45,650 mark after trading in a rather sideways manner throughout December. Price then broke below the channel of consolidation and has continued lower ever since plagued by relatively lower volatility until last night.
A shift in risk sentiment as Russia, Ukraine and US talks have thus far failed to allay concerns of a Russian invasion and subsequent NATO response. This morning we have seen lower equity markets in Europe, softer JPY and CHF crosses and lower treasury yields in what appears to be a global risk aversion play, at least for the time being.
The chart appears bearish upon first inspection. The largely talked about ‘death cross’ has come into fruition as prices broke 40k with the nearest level of support at 37,325 with little in the way before the psychological 30,000 level; followed by the key zone of support around 29,000.
While the posture of the market appears bearish, the MACD reveals less momentum in the latest decline compared to the prior test of 40k. Additionally, the RSI has just entered oversold territory suggesting a pullback may be due in the coming days. That being said, the current bearish trend remains intact until proven otherwise.
Bitcoin (BTC/USD) Daily Price Chart
Source: IG, prepared by Richard Snow
— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnowFX