Bitcoin (BTC) Price At Risk of Dropping Below $50K Again : Here’s Why
The post Bitcoin (BTC) Price At Risk of Dropping Below $50K Again : Here’s Why appeared first on Coinpedia Fintech News
In the past 24 hours, the cryptocurrency market has grown by 1.6%, reaching a total value of $2.08 trillion. However, this gain is tempered by a recent sell-off from a peak of $2.15 trillion—just around the midpoint of the last 30 days. Although prices have risen since yesterday, there’s a noticeable selling trend as prices go up. The market sentiment index has increased to 31, indicating more fear compared to 25 the previous day.
Bitcoin’s recent rebound from sub-$50,000 levels initially sparked hopes for a bull run, with expectations of reaching $90,000. However, Alex Kuptsikevich, senior market analyst at FxPro, offers a more cautious outlook, suggesting that Bitcoin might experience a $5,000 decline rather than a similar rise.
Kuptsikevich’s bearish stance is grounded in several technical factors, let’s dive in.
Is a Crypto Crash Coming? Top Factors to ConsiderResistance and the Death Cross
Bitcoin has struggled at $60,000. The potential “death cross,” where the 50-day Exponential Moving Average (EMA) falls below the 200-day EMA, suggests further downside risks. This pattern often means selling pressure could be stronger than buying interest, leading to further declines. The last major death cross for Bitcoin happened on September 12, 2023.
It initially caused a price drop to $24,900, but Bitcoin later recovered and reached new highs above $70,000 by March 2024. This shows that while the death cross can signal downturns, it doesn’t always mean they will happen.
RSI Analysis
The 14-day Relative Strength Index (RSI), which recently moved out of oversold territory, is also important. After Bitcoin’s sharp drop last Monday, the RSI showed an oversold condition, often suggesting a possible price recovery. However, with the RSI now losing strength, the risk of further decline remains high.
Impact of Upcoming Economic DataBitcoin’s short-term outlook could be affected by upcoming economic reports, especially the U.S. Consumer Price Index (CPI) data due on Wednesday. The CPI figures will provide insight into inflation trends. Higher inflation might lower expectations for Federal Reserve rate cuts, affecting overall market sentiment and Bitcoin’s price.
Political factors also add to the uncertainty. The shift in election prediction markets, with pro-crypto Republican candidate Donald Trump losing ground to Kamala Harris, could contribute to market volatility. The mix of political changes and economic data might further impact Bitcoin’s performance in the near term.
ConclusionBitcoin’s recovery from below $50,000 initially sparked bullish optimism, but technical indicators point to potential risks. The death cross, weakening RSI, and upcoming CPI data suggest a cautious outlook. Additionally, political developments could influence market sentiment and Bitcoin’s price direction.
What do you think? Will Bitcoin soar or plummet?