Bitcoin Stalls Around $40,000. Here’s How Investors Should React
Categories: Bitcoin US
Bitcoin’s price slid under $40,000 Monday morning before rebounding back up within a few hours. Bitcoin is hovering above $42,000 as of Wednesday. The $40,000 benchmark has emerged as a make-or-break level for Bitcoin because how it performs from there could determine whether the market enters another bullish or bearish phase, experts say.“Bitcoin could find medium-term support at around $37,000 and $31,000,” Kiana Danial, founder of Invest Diva, said in a TikTok last week analyzing Bitcoin’s price.
Investors have been wrestling with rising inflation, geopolitical crises, and concern over tighter monetary policy by the Federal Reserve. Minutes from the Fed’s March meeting last week showed its plan to shrink its balance sheet by $95 billion each month to combat inflation. The latest inflation report shows that consumer prices rose 8.5% in the year through March. That’s the fastest inflation rate since 1981.
These factors continue to drive extra volatility in the crypto and stock markets. The crypto market has been increasingly tracking the stock market lately, which combined with more mainstream adoption and the slumping prices we’ve seen to start the year, makes it even more intertwined with developing circumstances in Eastern Europe, experts say. Ethereum has followed a similar pattern.
The last time Bitcoin hovered below $40,000 was in early March until a brief surge following President Joe Biden’s signing of a sweeping executive order on cryptocurrency. Treasury to continue considering the issuance of a government-backed digital currency. It marked the first concrete steps by the White House to regulate cryptocurrency. Bitcoin’s price has been between $40,000 and $47,000 so far this week. Here’s how Bitcoin’s current price compares to its daily high point over the past few months.
Bitcoin hit its first high of the year in 2021 when it went above $60,000 in April, and the price movement since then highlights the cryptocurrency’s volatility in a time when more and more people are interested in getting in on the action. In the weeks between a July low point that took it below $30,000 and its most recent high point in November, Bitcoin swung wildly up and down. The future of cryptocurrency is sure to include plenty more volatility, and experts say this is all par for the course.