Analysis: Global Stocks 'Look Expensive,' Bitcoin Heading for $36,000

Bitcoin (BTC) ended the week lower on March 6 amid geopolitical tensions and related macro weakness.

Will 2022 usher in a "Great Depression"?

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hit its lowest level in more than a week on Sunday after fluctuating overnight.

At the time of writing, BTC/USD is testing the $38,000 support level with a three-day loss of close to 12%.

Despite the "after-hours" trading environment, the largest cryptocurrency is trending markedly lower amid swings in analyst sentiment on global stock markets.

Market commentator Holger Zschaepitz warned that day: “Global stock markets have lost $2.9 trillion in market value this week as the war could trigger a severe stagflationary shock.”

“Economists have downgraded their growth forecasts and raised their inflation forecasts. Global equities are now worth $11 billion, equivalent to 130% of global GDP, which looks expensive in current conditions.”

Some believe that the already shaky crypto market could fare just as badly — at least initially — in the event of a sharper trading correction.

Popular trader and analyst Pentoshi even predicted a repeat of the global financial crisis, which triggered the Great Depression 90 years ago.

However, some established pundits take a very different position. In its latest cryptocurrency market outlook report published on March 4, Bloomberg Intelligence remains bullish on Bitcoin and Ethereum (ETH).

“In 2022, most assets face an ebb as inflation inevitably returns to 40-year highs, but this year could be another milestone for Bitcoin,” it wrote.

"If risk assets don't fall and take some price pressure off, inflation indicators are more likely to remain strong, leaving the central bank with little choice but to raise rates more aggressively."

BTC could drop to $36,000

Fear still reigns supreme in the short-term, with few signs of a bullish outlook for Bitcoin focusing on the continuation of the current trading range.

“Bitcoin is at a critical level,” concluded Yann Allemann and Jan Happel, co-founders of on-chain analytics firm Glassnode.

“RSI is oversold and trending up. If price fails to break $40,000, we will drop to support. Support: $34-36,000, Resistance: $43-45,000.”

The accompanying chart shows the historical value of BTC/USD at current prices and the correlation between such RSI lows and price reversals.