Reaching a low of $55,700 on Monday, bitcoin is still a few dollars below last week’s low, which is seen as a potential collapse of this cryptocurrency.
Bitcoin owes its decline to a stronger dollar, which rose on news that US President Joe Biden will reappoint Jerome Powell as head of the Federal Reserve, downplaying speculation that Powell could be replaced as Fed head by Lael Brainard, whom the market considers a big dove. Thus, it strengthened expectations of an even more “hawkish” attitude of the Fed.
In addition to this news, we should also note the movement of BTC and cryptocurrencies in general since the beginning of the week. The hourly chart now clearly shows bitcoin support at $55,750, a break below which will already be an important “bear” signal. In this case, the level of $55,000 will become the next potential threshold of support, which should be paid attention to.
Bitcoin needs a return above the $60,000 mark in order to go higher and turn to the bull market. Before that key threshold, however, there are a few more short-term resistances, especially at the $57,000 level.