Over the past few days the cryptocurrency market has weakened. Bitcoin (BTC) has fallen for four consecutive days, despite recent attempts to reclaim the $50,000 level. Is this downtrend temporary, and how far could it go? First, a few key points:
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The pullback followed China’s confirmation that it will continue to crack down on cryptocurrencies.
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Heightened volatility driven by the war in Europe is another significant risk factor.
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Bitcoin (BTC) will likely test $35,000 before finding enough demand to resume an upward move.
Data source: TradingView
Bitcoin (BTC) – where is it headed?
From a technical analysis perspective, the most important level to watch right now is support near $35,000. That price has shown resilience over recent weeks, and it is likely BTC will hold above it. At the time of writing the asset was trading around $38,800.
If bearish pressure intensifies and pushes the price below $35,000, the next support zone to monitor would be near $32,000. There are also several fundamental drivers to keep an eye on. The expected regulatory crackdown in China remains the primary concern for many investors. Meanwhile, the conflict in Europe is escalating and could increase market instability in the near term.
On the other hand, if BTC manages to break sustainably above $40,000 and maintain higher price action, we could see a number of bullish moves in the coming week.
Is now a good time to buy BTC?
Bitcoin has pulled back significantly from its all-time highs, and some warnings suggest the token could fall further in the first quarter. Nevertheless, the long-term outlook for Bitcoin remains broadly positive. For investors with a longer horizon, the price declines observed so far this year present a compelling buying opportunity.