Bitcoin crashes to $38,000 and fear grows among investors: how far can it go?

After a quiet Saturday, cryptocurrencies began to slide after British Prime Minister Boris Johnson’s comments on financial lockdowns for Russian companies should the situation escalate. With cryptocurrencies being the only markets that are constantly open, the reaction to geopolitical fears in the region could herald a bigger ripple effect next week as traditional markets open. Monday is a holiday on Wall Street.

The big question at the moment is whether BTC will continue to drop to lower levels after dropping below $40,000. In principle, it seems that if the conflict escalates, the markets are ready to continue falling.

“Bitcoin signals a tough week ahead: Inflation unlikely to fall unless risky assets do: Most assets subject to low tide in 2022, in inevitable reversal of higher inflation measures high in four decades, but this year could mark another milestone for Bitcoin,” said Mike McGlone. , chief commodities strategist at Bloomberg Intelligence.

“Over the past year, $40,000 has been a very critical level for BTC. Every time the price went below and then recovered, we saw a big upside breakout. Probably a good area to watch at the moment”, commented this Sunday.

The Crypto Fear & Greed Index was back in “fear” territory that day, having seen a drop of more than 50% in just four days, after briefly entering “extreme fear”. Analyst and YouTuber Juan Rodríguez, known on social media as Juan Biter, sees a visit to $37,000 for bitcoin price on the horizon. This, in case there is a breakout of the 40 thousand downside.

A much stronger support in the eyes of the analyst is between 30 and 37 thousand dollars, precisely. This range corresponds to the average purchase price of some of the largest institutional factors, such as MicroStrategy, Tesla or Square.

Even around 45% of bitcoins currently in circulation were purchased above $30,000. This includes a lot of whales (addresses with at least a thousand BTC), so this level looks very solid for the foreseeable future.