The Bitcoin price stays pressured on Monday, treading water around last week’s lows and threatening the $40,000 figure for the first time since late September. Should this critical support fail to withstand the selling pressure, the short-term technical picture will deteriorate further in the coming days.
One of the major drivers behind the sell-off in the cryptocurrency markets is the Federal Reserve that could proceed to interest rate hikes earlier than expected. Friday’s US jobs report showed wages came in better than expected. At the same time, the unemployment rate declined sharply last month, suggesting the central bank may need to tighten its policy more aggressively this year to fight inflation and prevent the economy from overheating. Rising interest rates make digital currencies less attractive along with other volatile assets.
Also, a negative start to the year for bitcoin and other cryptocurrencies was due to the political upheaval over energy prices in Kazakhstan, the second-biggest country for bitcoin mining (after the United States), amid Internet disruption in the troubled country. In the immediate term, a break below the $40,500 support would open the way towards the $40,000 mentioned zone.
Then, the coin may threaten September lows in the $39,500 area, followed by the $37,000 figure. On the upside, the immediate significant target now arrives at $42,400.