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Bitcoin (BTC/USD) continued to decline over the weekend, dropping to the key support level of $40,700. Marcus Sotiriou, analyst at the UK-based digital asset broker GlobalBlock, expects upside to the mid-$40,000 region in the short term due to the interaction with this significant level.
Fear reached 10 on Fear and Greed Index
On Saturday, fear reached 10 on the Crypto Fear and Greed Index, the lowest since the crypto market hit a low on July 21 before rallying by over 100%.
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Galaxy Digital CEO Mike Novogratz supports this prediction, anticipating the price of Bitcoin to bottom at around $38,000 – $40,000. He said:
I know big institutions who are going through their process to put positions on. They’re going to see those as attractive levels to buy.
Impact of global market on Bitcoin price in short term
Will the global market have an impact on Bitcoin’s price in the short term? Although the crypto market is oversold, global markets and economic conditions have a profound impact on it. Factors like the Federal Reserve’s plans to increase rates and reduce the frequency of monthly bond purchases this year have contributed to Bitcoin’s selloff.
High CPI growth will cause further sell pressure
US inflation data will be released on Wednesday. Expectations are for the consumer price index (CPI) to increase by 7.1% in 2022 and 0.4% in January. Further pressure to sell Bitcoin can be anticipated if the figure released is higher than expected. This is because markets are oriented forward and high inflation will provoke the Federal Reserve to intervene further to control it.
According to Marcus Sotiriou, the decline will only be short-term, even if inflation figures are higher than expected.
About GlobalBlock
GlobalBlock is a UK based digital asset broker and publicly listed on Canada’s TSX Venture exchange (TSXV:BLOK) that provides a personalised telephone broking service, trading platform and mobile app.
Established in 2018 by an experienced team of financial services professionals, GlobalBlock acts as a trusted agent serving the cryptocurrency needs of individuals, corporates, institutional financial firms and intermediaries, providing best execution trading and safe custody of digital assets.