Forex Analysis & Reviews: 07.02.2022 - Bitcoin recovers above $40k...

07.02.2022 05:39 PM

Bitcoin recovers above $40k and may continue to rise in price

The main cryptocurrency has completed a local period of consolidation near the $38k resistance area. The price tested the area four times over the past two weeks and eventually broke through it. As of February 7th, Bitcoin is trading at $42.8k. The whole market followed the bitcoin, showing an increase of 3% over the past day.

Despite the steady growth, the main cryptocurrency has not yet got out of the $32k-$43k congestion. The asset is at the final stage of trading through the resistance area, but it can go down with a healing goal. The main reason for this remains the neutrality of investors and the fear of stock indicators, which ended the last trading week with a fall.

In the near future, we should expect consolidation in the $40k-$42k range for further movement to the upper limit of the range. The final level of $44.2k is a difficult resistance zone due to the large number of shorts and the downward trend line. Therefore, the breakdown of this position on the first attempt raises questions. With a high degree of probability, the asset will hit this mark, but will subsequently correct.

On the downside, the price should meet serious support around the $39k-$40k area. But given the fact that investors opened pending shorts near the round mark, a fall to $38k can be allowed. Subsequently, we are waiting for a local consolidation, a return to the $40k-$42k range and a bullish breakdown of the final segment of this area of accumulation.

Thus, the market will be able to correct the upward movement of the asset, additionally collect liquidity by dumping shortists, and rush up. In addition, a local decline will complete the formation of an inverted "head and shoulders" technical analysis pattern with upside potential to $56k. In general, the situation on the market is normalizing, although there is skepticism about long positions. Investors have cheered up but are still looking to the stock market before active actions on the cryptocurrency.