Bitcoin (BTC), which fell to the weekly close March 6, was driven by geopolitical tensions, and macro weakness.
BTC/USD 1-day candle chart (Bitstamp). Source: TradingView
2022: Could there be a “Greater Depression?”
Cointelegraph Markets Pro and TradingView data showed that BTC/USD had fallen to its lowest level in over a week Sunday, after volatility returned overnight.
At the time of writing, the pair was still testing $38,000 support. Three-day losses were close to 12%.
Despite the “out-of-hours” trading environment, the trend was down for the largest cryptocurrency as analysts were unsure about global equities.
Holger Zschaepitz, a market commentator, warned that global equities lost $2.9tn in mkt caps this week because war could trigger major shocks.
“Economists have cut their growth forecasts and raised inflation projections. Global stock mkts are now worth $110tn. This is equivalent to 130% global GDP. It seems expensive in the current environment.
A larger TradFi correction could cause a worsening of the crypto market, as some argue.
Pentoshi, a popular trader and analyst, even predicted a repeat of 1990’s Great Depression.
This year’s most exciting event. Global markets will collapse. Any market trading above 0 is too high. This will be called. They will call this “The greater depression”, which will be 10x more severe than the Great Depression. Goodnight https://t.co/v1JUsy1eyA
— Pentoshi (@Pentosh1) March 6, 2022
However, some seasoned pundits took a different position. Bloomberg Intelligence’s March 4th crypto market outlook report stated that it remains bullish on Bitcoin and Ether.
It stated that most assets would be subject to the “ebbing tide” in 2022 due to the inevitable reversion to the highest inflation rate in 40 years, but it could also indicate another milestone for Bitcoin.
“If risk assets do not decline and decrease some of the price pressure,” inflation measures will be more likely to remain buoyant. This leaves central banks with few options but to raise rates aggressively.
BTC may be eligible for $36,000 in support
The outlook for Bitcoin was bleak, with trepidation still dominating the short-term. Instead, it focuses on the continuation of its current trading range.
Related: Bitcoin drops $40K after support levels for Bitcoin fall to 1-week lows
Yann Allemann, Jan Happel and co-founders at on-chain analytics firm Glassnode, stated that Bitcoin is at a critical point while introducing the new edition of their “Uncharted” newsletter.
“RSI is trending up and oversold. If the price does not break below $40k, then we will drop to support. Support: $34-$36k Resistance: $43-$45k.”
BTC/USD chart using RSI. Source: Negentropic/ Twitter
The graphic below shows how historically high BTC/USD was at current price and the correlation between such RSI Lows and price reversals.