The Russia-Ukraine crisis, higher rates, and new crypto regulations in the US could be the “perfect storm” that sends Bitcoin to $30,000, said the analyst.
Bitcoin tested lows of $36,500 and is finding it hard to stay above $38k amid investor uncertainty.
Bitcoin is down 3% in the past 24 hours, with price movement on Tuesday including an intraday low of $36,500.
The bellwether crypto is down more than 11% this past week and fell heavily on Monday amid a confluence of macro factors analysts say could combine for a ‘perfect storm’ of negative price drivers.
As of writing, the cryptocurrency has bounced above $37k but remains weak. According to one analyst, the current market conditions might see BTC prices fall below the major support level at $30,000.
This could be the “perfect storm”
On Monday, Russian President Vladimir Putin signed a decree recognizing the self-proclaimed republics of Donetsk and Luhansk as independent. He then followed it up with an order sending troops into the Ukrainian regions, prompting sanctions from the US, and the European Union. The UN Security Council also met and condemned Putin’s move.
Bitcoin price reacted alongside stocks to hit multi-week low, with further rot likely as US markets opened after Monday’s President Day holiday.
The fresh downside pressure comes amid continuing jitters among investors as the US Federal Reserve looks to implement the first of many rate hikes.
Meanwhile, the crypto market is anticipating a regulatory shift in the US with an impending executive order from the White House.
“The Ukraine crisis, compounded by rising interest rates and crypto regulations in the US, may create a perfect storm driving the bitcoin to test the $30,000 level,” CloudTree Ventures’ Winston Ma told the Street.
According to him, Bitcoin continues to act “more like high growth tech assets,” and the risk-off sentiment may greatly influence crypto markets.
Crypto analyst KALEO says there is the possibility of a bullish bounce to $40,000 and above. However, with weakness still abounding, the next major support level could be found at $32,000.
“BTC found support at the base of the Feb 3rd lows where we saw the bullish leg up. Macro structure still looks weak, and I wouldn’t find any confidence in this bounce until a break above $40K. Still expecting this to slowly bleed out until a breakdown to ~$32K,” he said.
Bitcoin was trading around $37,785 at the time of writing.
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