Bitcoin price tanks as covid protests erupt in China, pushing investors into risk-off mode
- November 28, 2022
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- Bitcoin price slipped 3.3% in a fresh start to the week as Covid protests erupt in China.
- As a result, investors have moved into a risk-off state, sending the US Dollar higher.
- Regardless, a chance at recovery is likely for BTC if it can bounce off $16,120 and flip $16,800 into a support level.
Bitcoin price saw a sudden sell-off on November 28 after a consolidative weekend. This bearish outlook comes as major protests erupt in China due to Covid restrictions. As a result of the growing unrest in the east, investors seem to be heading into a risk-off mode, pushing safe-haven assets like the US Dollar, bonds, and Yen higher.
Due to the high correlation between Bitcoin price and the stock markets, BTC is still a risky asset, which explains its recent downturn. Regardless of this minor setback, there is still hope for the big crypto to make a comeback.
Bitcoin price can still recover
Bitcoin price crashed 7% between November 19 and 21, which formed the second bottom at $15,443. After this move, BTC saw a 9% upswing that pushed it to $16,800, creating the fourth lower high.
After four days of consolidation, Bitcoin price finally broke down and tagged $16,120, the midpoint of the $15,443 to $16,797 range. As long as BTC remains above this level, there is a high chance that BTC will likely retest the previous Monday’s high at $17,188 and June lows at $17,593.
From a short-to-mid-term perspective, a flip of the $17,593 hurdle could open the path for Bitcoin price to retest the $19,011, the highest volume traded over the last 11 months. Additionally, the Relative Strength Index shows that the overall momentum is still bullish as it continues to produce higher lows since November 9.
BTC/USDT 4-hour chart
On the other hand, if Bitcoin price fails to hold above the $15,700 support level, it will be the first sign of weakness. A breakdown of this level, followed by a four-hour candlestick close below $15,443 without a quick recovery, will invalidate the bullish thesis.
In such a case, Bitcoin price could explore the possibility of revisiting the high timeframe support level at $13,575.