BTC price action heads lower on the day, but strength is still there beyond the short term, says Michaël van de Poppe.
Bitcoin (BTC) faced selling pressure at the Feb. 21 Wall Street open as United States’ stock markets opened down.
BTC price skids lower with US stocks
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dipping to daily lows of $24,324 on Bitstamp.
Bearish signals were already in for the pair after it saw swift rejection during its latest attempt to flip $25,000 to support.
Amid suspicions over whale movements on exchanges, monitoring resource Material Indicators concluded that the 200-week moving average (MA) at $25,100 needed to become support for Bitcoin to change its long-term trend.
“IMO, until we see full candles above the 200 WMA this is still distribution in a bear market rally, and with the bid wall above $24k, shorting from this level has about as much short term risk as longing,” it wrote in part of comments in its latest Twitter update.
An accompanying chart of the Binance order book showed liquidity moving closer to spot price prior to the Wall Street open.
Caleb Franzen, senior market analyst at Cubic Analytics, meanwhile had a bearish prognosis for the S&P 500 in particular, with risk asset performance still liable to weigh on crypto.
“The S&P 500 is gapping lower, trading decisively below my $4,080 line in the sand,” he summarized alongside a chart on the day.
“A retest of the 200-day moving average cloud is likely, which will be a vital support level.”
The S&P 500 was down 1.3% at the time of writing, while the Nasdaq Composite Index was 1.7% lower.
The U.S. dollar index (DXY), despite being broadly inversely correlated with stocks and crypto, also took a hit at the open, dropping to 103.77 before rebounding.
“USD higher highs and lows have held through much of Feb. 103.82 as support in DXY, current higher-low,” part of commentary from trader and stategist James Stanley read.
Stanley additionally noted the minutes from the Federal Reserve’s Federal Open Market Committee (FOMC) as a potential market catalyst. Due on Feb. 22, the minutes reflect the February FOMC meeting, as a result of which the Fed raised its key interest rate by 25 basis points.
BTC price corrections “relatively shallow”
Adopting an optimistic short-term view, meanwhile, Cointelegraph contributor Michaël van de Poppe, CEO and founder of trading firm Eight, was confident that the current dip would be a temporary one.
Related: Bitcoin active addresses ‘concern’ analyst despite 50% BTC price gains
“Markets correcting, which is great for people who look for entry points. Might go down a bit more from here before we’ll turn around. Week of consolidating before continuation,” he told Twitter followers.
“FOMC minutes tomorrow as well. Remember, investment wise, still super cheap for Bitcoin.”
Chart analysis from Van de Poppe showed BTC price action acting within a narrowing wedge construction, with a key area of support below stretching to $22,500.
The day prior, his longer-term forecast called for higher highs before a more substantial correction, this nonetheless still apt to take Bitcoin back to $20,000.
“Corrections remain to be relatively shallow. I think that we’ll continue the run towards $35-40K before we’ll have a harsh correction, maybe even to $20-25K. Maximize profits, start allocating towards $USDT the higher we come, buy on the correction in second half of 2023,” he wrote.
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