Bitcoin falls below $38K; are more declines ahead?

Posted: 23 February 2022 4:00 am
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Bitcoin broke the key US$40,000 support level and moved lower as global tensions over Ukraine escalated. Does this signal another leg down?

Bitcoin prices bounced back somewhat Tuesday US time, after a sharp decline following Russia's deployment of troops to two separatist regions in eastern Ukraine hours after recognizing their independence.

They remained below US$38,000 after breaking key support levels.

Is this the catalyst that will push Bitcoin to US$30,000?

Russia's move affected all markets

Stocks are also struggling today, with most US indexes and global markets down.

On the other hand, oil prices spiked. Futures for West Texas Intermediate (WTI) crude gained almost 5% to around US$95.50. This puts oil prices closer to US$100 and potentially beyond, which is the main worry of investors.

If oil prices remain high — or go higher in case of war escalation — it could lead to higher inflation. This could force the Federal Reserve to further tighten monetary policy and raise interest rates even higher to fight inflation. Tighter monetary policy and high interest rates are bad for Bitcoin as it makes borrowing money to invest in riskier assets more expensive.

Bitcoin pulled back to support levels

After days of uncertainty, Bitcoin broke the US$40,000 price level. The next support price, where buyers are considering a bargain, stands at US$35,000. After the news of Russia's military advancing into the two Ukrainian regions, Bitcoin briefly dropped to US$36,300.

The next major support level still stands at US$35,000, which may be the next target. A break through this level opens up the US$30,000 price target.

Finder asked 33 fintech specialists in January to offer price predictions for Bitcoin by year's end. Most of them believe Bitcoin will make new all-time highs at the end of 2022. If this plays out, current price levels may be seen as a decent entry point.

Interested in cryptocurrency? Learn more about the basics with our beginner's guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Kliment Dukovski owns Bitcoin as of the publishing date.

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