The world’s first cryptocurrency is suffering another crisis. On Monday, February 7, bitcoin traded at $38,000, down by 45% from its all-time high of $68,789 in November 2021.
Bitcoin and the whole cryptocurrency industry are in correlation with the global equity market, analysts say. Consequently, the current plunge in BTC has a direct impact on the major stock indices like the Nasdaq 100, the S&P 500, etc.
Last week, the flagship cryptocurrency soared to $39,115 from the low of $33,184. Notably, Fundstrat's technical strategist Mark Newton does not expect BTC to radically reverse. At the same time, the analyst has detected signs of the stabilization of the main digital asset after a collapse in early 2022.
According to Mark Newton, the key level for bitcoin stands at $40,000. The analyst suggests that the bull run will continue as soon as the virtual asset touches the barrier. Alternatively, a fall below $35,000 could mark the beginning of a losing streak for BTC. Eventually, it may nosedive below $33,000. “Until $40,000 is exceeded on a daily close, it remains in a downward sloping pattern, and it's tough to rule out further weakness technically speaking,” Newton said.
The current massive drop in BTC is nothing new, FX strategists at Morgan Stanley assume. Experts do not rule out the likelihood of serious problems if the coin plummets below $28,000. In such a case, bitcoin could hit the bottom.
Investors are now growing more cautious about the current state of the bitcoin market and are turning to other assets. They will return to the cryptocurrency market on one condition: if the uptrend is confirmed. Based on Morgan Stanley’s estimates, the target level for BTC is now seen at $45,000.
