The S&P 500 index has fallen more than 2% in February but Bitcoin is still latching on to minor gains of 1%, with one more day of trading left in the month. The gains in February are much more muted compared to the previous month because of the hotter-than-expected inflation data in the past two weeks.
The latest data to rattle the markets was the core personal consumption expenditures price index, which increased 0.6% in January and was 4.7% higher from a year ago. Economists expected readings of 0.5% and 4.4%.
We warned traders in the previous analysis that bears are unlikely to give up and Bitcoin may plummet to the 50-day simple moving average (SMA) and that is how it played out. The bulls pushed the price above $25,000 on February 21 but they could not sustain the higher levels.
That may have tempted some short-term bulls to book profits and aggressive bears to establish short positions. Continued selling pulled the price below the 20-day exponential moving average (EMA) on February 24 but a minor solace for the bulls is that the 50-day SMA did not break down. The 20-day EMA has flattened out and the relative strength index (RSI) is near the midpoint, indicating a balance between supply and demand. If the price breaks below the 50-day SMA, the pair could plummet to $21,500. This level is likely to attract strong buying by the bulls.
If that happens, the BTC/USD pair may swing between $21,500 and $25,000 for a few days. A break above $25,000 or below $21,500 could start a trending move. Until then, the price action is likely to remain random and volatile.
Lastly please check out the advancement’s happening in the cryptocurrency world.
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