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Bitcoin remains in bad shape, between risk aversion and bearish signals

Published 18/01/2022, 10:34
© Reuters.
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Investing.com - The pressure remains bearish on Bitcoin and most cryptocurrencies (except Cardano) this Tuesday morning, with BTC/USD struggling to hold the $42,000 mark, after bottoming at $41,600 last night.

Caution and general risk aversion among investors seem to be the main reason for the weakness of Bitcoin. The Q4 earnings season starts this week in the US, and the Fed seems increasingly ready to raise rates, which worries the market.

Few investors expect Bitcoin to hit $100,000 this year

It is also worth noting that according to the results of a JP Morgan survey released last night, only 5% of investors expect Bitcoin to surpass $100,000 by the end of the year.

On the other hand, investors overall maintain a bullish view of Bitcoin for 2022, with 55% of respondents believing it should return to $60,000 by the end of the year.

The chart environment remains bearish for the BTC/USD

From a chart perspective, the only bullish argument for Bitcoin is the strength of the $40,000 support, which was last tested on September 21 and January 10, both times quickly attracting buyers.

Regarding bearish factors, it is worth noting that Bitcoin has been moving below a downtrend line visible in daily data since the all-time high in November 2021. A return above about $43,500 is needed to start testing this line at present.

It should also be remembered that last week Bitcoin recorded a "death cross", a major bearish technical signal that corresponds to the crossing of the 50-day moving average below the 200-day moving average, but which has not yet resulted in a significant fall.

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