Bitcoin continues lower today as $38,000 becomes the latest level the bulls are unable to break.

Source: TradingView

TradingView data painted a bleak picture for BTC/USD from the start of the week when support at $38,000 abruptly disappeared after holding all weekend.

#BTC Update 1h TF

First retest of key trendline since reclaim at $38.5k

Current price range $36.6k – $37.8k pic.twitter.com/sjxUv7AGlV

— AN₿ESSA (@Anbessa100) February 21, 2022

“1 Hourly Chart Update: First major trendline retest since $38.5K retracement. The current range is between $36.6K and $37.8K.”

Although analyst hopes for a bottom could be dashed, the chances of a rally to $40,000 remain very good.

Crypto analyst Ed tweeted that “this drop is not too deep and will soon see a rally to 40k.”

In a video update, Crypto Ed predicted a multi-level downtrend, with $40,000 forming a slight downside target before another drop likely to push the price towards $30,000.

“If bitcoin somehow manages to get back above $40k and rally, then I will be bullish; if not then discount. But it will take a ‘miracle’ for such a bullish case to come true.”

Macro factor

Meanwhile, Monday’s Presidents Day holiday on Wall Street means a lack of compelling volume in the crypto markets, likely exacerbating moves in both directions due to liquidity concerns.

Global stocks are under renewed pressure after Russian President Vladimir Putin ordered troops to be deployed to breakaway regions in eastern Ukraine.

Vladimir Putin signed a decree recognizing Donetsk and Luhansk in eastern Ukraine as independent states. In addition, he ordered the army to move into the area to patrol for peace. The US assumes that Russian troops can invade the Donbass region of Ukraine as early as Monday or Tuesday evening EST.

Before the actions of the current Kremlin, the West promised to respond with sanctions. US President Biden on Monday signed an executive order imposing sanctions on two Russian-backed breakaway republics in eastern Ukraine.

As the conflict over Ukraine appeared to intensify, US and European stock futures fell further.

Futures contracts linked to the Dow Jones Industrial Average fell 494 points, or 1.45%. S&P 500 futures fell 1.71% and Nasdaq 100 futures fell 2.3%.

Oil prices rose, with West Texas Intermediate futures up 3% to $93.81 a barrel.

The reports of deaths at the Russian-Ukrainian border came as European stock markets tumbled, with London’s FTSE 100 down 0.5% on the day and Germany’s DAX down 1.3%.

Traders are also keeping an eye on the Federal Reserve as the Federal Reserve is expected to hike interest rates several times starting next month. According to CME Group’s FedWatch tool, traders are betting there is a 100 percent chance the Fed will hike rates after its March 15-16 meeting.

Meanwhile, another tech crackdown in China has caused problems exclusively for Asian markets, with Tencent falling more than 6% in trade.

Tencent leads #China Tech sell-off amid fears of further promotion. Tencent fell as much as 6.3%. Beijing’s banking regulator has warned of illegal fundraising schemes and an industry body has vowed Mon will resist speculative deals with Cap Mkt. Alibaba fell 4%. (BBG) pic.twitter.com/OZBDK2Hbyv

— Holger Zschaepitz (@Schuldensuehner) February 21, 2022

“Tencent is leading the sell-off in Chinese tech stocks amid fears of further repression. Tencent fell as low as 6.3%. Beijing’s banking regulator has warned of illegal fundraising schemes, and an industry association has promised to crack down on speculative capitalization deals. Alibaba down 4%.”

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