Bitcoin Price Drops As Covid Protests Erupt In China, Pushing Investors To Risk-Free Mode

  • The price of bitcoin fell 3.3% in a fresh start to the week as anti-Covid protests erupted in China.
  • As a result, investors moved into a state of risk aversion, which led to the growth of the US dollar.
  • Either way, BTC has a chance for a recovery if it can bounce off $16,120 and turn $16,800 into a support level.

The price of bitcoin suddenly fell on November 28 after consolidating over the weekend. This bearish forecast is due to massive protests in China due to Covid restrictions. With the growing turmoil in the east, investors seem to be moving into risk mode, raising safe-haven assets such as the US dollar, bonds and the yen.

Due to the high correlation between the price of Bitcoin and the stock markets, BTC remains a risky asset, which explains its recent decline. Despite this small setback, there is still hope for the return of a major cryptocurrency.

Bitcoin price can still recover

The price of bitcoin fell 7% between November 19 and 21, making a second low at $15,443. After this move, BTC surged 9%, bringing it to $16,800, creating a fourth lower high.

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After four days of consolidation, the price of bitcoin finally fell and hit $16,120, which is the midpoint of the $15,443 to $16,797 range. As long as BTC remains above this level, there is a strong possibility that BTC will retest the previous Monday high at $17,188 and the June low at $17,593.

In the short to medium term, a pullback from the $17,593 barrier could pave the way for Bitcoin price to retest $19,011, the highest trading volume in 11 months. Moreover, the Relative Strength Index shows that the overall momentum is still bullish as it continues to make higher lows since November 9th.

BTC/USDT 4-hour chart

On the other hand, if the price of Bitcoin fails to hold above the $15,700 support level, that would be the first sign of weakness. A break of this level followed by a 4-hour candle close below $15,443 without a quick recovery would disprove the bullish thesis.

In such a scenario, Bitcoin price could explore revisiting the high expiration support at $13,575.

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