On Monday, the leading cryptocurrency showed a steady decline. At the time of writing, BTC dropped by 0.82% to $42,818.
Last week, Bitcoin reached $44,500 amid the publication of a report by the US Department of Labor on the record increase in the rate of consumer inflation over the past decades in December 2021. However, on Sunday, the value of bitcoin slumped to $43,100 and continued to decline steadily on Monday.
Leading altcoins immediately followed the flagship cryptocurrency and started to move downwards. Thus, ethereum lost 1.41% and is trading at $3,279, and binance coin decreased by 1.9% to $486. According to data from CoinMarketCap, a popular online platform that fixes prices of digital assets, the value of all cryptocurrencies tracked by the website fell by 0.5% to $2.05 trillion over the past 24 hours.
Despite many attempts, bitcoin failed to develop growth momentum last week. Not surprisingly, since the start of Monday’s trading session, the digital asset continues to slide into a consolidation area of around $42,000. If BTC continues its bearish trend in the coming days, it may develop a downtrend last seen in November 2021.
Such a scenario could trigger bitcoin to fall towards $31,000 by the end of this week. However, BTC can fall to such low levels only if bulls fail to hold the price above support of $40,000, which they successfully held both in September 2021 and in January 2022. In addition, a large-scale collapse of the digital asset requires a rather significant negative news background.
However, many experts are confident that bitcoin is likely to be bullish this week and the asset may show strong growth in the coming days to reasonable levels. Analysts say that BTC is unlikely to break through resistance of $45,700 – $46,000 amid the lack of fundamental data. Thus, bitcoin may be trading within the range of $42,000 – $46,000 this week.
Cryptocurrency market experts agree on one thing unanimously. Today it is too early to talk about a new rally of digital assets. Bitcoin’s jump above $45,000 may confirm that bullish trends prevail. Meanwhile, the first cryptocurrency is likely to perform a pullback within the formed downward trading channel.
The next spectacular wave of volatility may overwhelm the crypto market in mid-March amid an increase in the key rates in the US. Experts predict that bitcoin may collapse sharply, but later be able to quickly recoup the losses and start increasing. Analysts attribute this scenario to investors’ traditional perception of the digital asset as a tool to hedge inflation risks.
The material has been provided by InstaForex Company – www.instaforex.com