Bitcoin started the new week in the red

(ORDO NEWS) — Like most “risk” assets, Bitcoin started the new week in red, with a recent low near $16,050, after spending most of yesterday in the $16,500 region.

At the moment, BTC/USD is down almost 2% from yesterday to $16,200 and remains stable.

As with the stock market, Bitcoin’s weakness is linked to risk aversion in global markets on Monday as protests in China worries investors around the world.

Chinese citizens clashed with police over the weekend in several cities, including Beijing and Shanghai, as public dissatisfaction with the zero-tolerance policy for COVID-19 came to a head after a fire in western China last week.

The clashes also came after riots broke out in Zhengzhou following the government’s lockdown in the city.

One of the risks is that the turmoil in China could lead to further restrictions in the global supply chain, making it harder to fight inflation and therefore create the risk of more central bank rate hikes than currently expected, negatively impacting cryptocurrencies. as well as on all speculative assets.

In more bitcoin-specific news, but more positive for cryptocurrencies, data from blockchain data analysis company Sentiment shows that the number of bitcoins represented on crypto platforms has fallen below the threshold of 6.95% of the total supply.

For the first time since November 2018, this figure fell below 7%. This is a positive factor in the long run, as investors holding their bitcoins off platforms indicates the intention of long-term storage. On the contrary, the increase in the number of bitcoins on the platforms is interpreted as an imminent intention to sell them.

Santiment noted that the trend of removing bitcoins from exchange platforms and storing them in crypto wallets has been ongoing since March 2020, but this trend accelerated significantly after the FTX bankruptcy.

Finally, from a charting perspective, last week’s EU low at $15,500 and the $15,000 psychological threshold would be the first potential support levels to watch for if Bitcoin continues to fall below $16,000. Note that a drop below $15,500 will bring the cryptocurrency back to 2 year minimum.

On the other hand, short-term charts allow us to identify the first intraday resistance in the $16,600 area, before the $17,000 psychological threshold.

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