Bitcoin fell and approached the $62,000 level during the Wall Street open on Monday, along with the weakening in global risk appetite. The escalation of tension between the USA and Iran and the increasing uncertainty in the energy market were effective in the sales pressure.
Geopolitical pressure came to the fore in the markets
US stock markets started the day with a decline. While the Nasdaq Composite Index remained approximately 1 percent negative after the opening, investors closely followed the developments originating from the Middle East. Oil prices also remained high, with US crude oil WTI trading around $75 per barrel.
US President Donald Trump said in his statement to Fox that Washington will assume control of the Strait of Hormuz, which Iran closed at the weekend. The Strait of Hormuz is known as one of the critical transit points in global oil shipments.
Donald Trump said that the USA will keep the Strait of Hormuz under control and play a protective role there.
Following these statements, the pressure on risky assets became evident. Bitcoin also showed an appearance in which sellers increased control after the first withdrawal that started after the weekly close.
Short positions and critical levels are monitored
Market analyst JDK Analysis stated that intense short positions were opened in Bitcoin during the decline before the New York opening. According to the analyst, the price is around mVWAP, an important technical level that buyers should protect. mVWAP is used as an indicator that expresses the volume weighted average price across exchanges.
Mini dictionary: mVWAP shows the average price level, weighted by the volume of transactions over a certain time period. Traders use this data to monitor areas of support and resistance in the short term.
JDK Analysis states that the sales in the spot market continue, the outlook remains weak, but if there is strong spot demand, the rise may compress many short positions.
The analyst warned that if this level cannot be maintained, the 60 thousand dollar region may come to the fore again. Other commentators in the market also noted that while the amount of open positions increased, aggressive short transactions reached a remarkable level.
The bullish expectation has not completely disappeared
However, not all market participants believe that the decline will be permanent. Trader Roman said that there remains a possibility of an upward move in the short-term outlook. Roman argued that various indicators, including the relative strength index RSI and trading volume, indicate fatigue in the downward momentum.
According to Roman, the possibility of a recovery remains on the table, but the realization of this scenario will depend on what structure the price will establish. The expectation of a return to the 70 thousand dollar level in the market has not been completely abandoned, but geopolitical developments and the strength of spot demand will continue to be decisive in the short term.
