Bitcoin Price Forecast: Analyst Predicts $5K Decrease More Likely Than $5K Increase

The dominance of sellers in the BTC market has been highlighted by an analyst at FxPro. Despite a swift recovery from sub-$50,000 levels last Monday, Bitcoin (BTC) has failed to maintain its upward momentum, leading to concerns about a potential downturn. The market sentiment turned bullish following the price surge, with projections calling for a rally to $90,000 and beyond.

However, one analyst predicts a short-term decline in BTC’s price, estimating a $5,000 drop from the current rate of approximately $58,500. Alex Kuptsikevich, a senior market analyst at FxPro, expressed a bearish outlook, attributing it to Bitcoin’s inability to sustain levels above $60,000 post the “death cross,” a bearish signal triggered by the 50- and 200-day simple moving averages crossing.

Kuptsikevich noted that Bitcoin’s failure to breach the $60,000 mark and subsequent selling pressure indicate a prevailing seller dominance in the market. He pointed out that the 14-day relative strength index (RSI) no longer signals oversold conditions, suggesting a potential further decline in BTC’s price.

The RSI, a momentum indicator measuring the speed and change of price movements, had dipped below 30 after the crash last Monday, indicating oversold conditions that often precede a temporary halt in the downtrend and a subsequent price recovery. Kuptsikevich emphasized that the RSI index on the daily timeframe has moved out of oversold territory, indicating a lack of momentum for further price strength.

The likelihood of BTC experiencing short-term weakness may increase if the U.S. July consumer price index data, set for release on Wednesday, reveals higher-than-expected inflation rates, which could dampen hopes for Federal Reserve rate cuts in the near future.

Bitcoin’s recent bounce above $60,000 retraced more than 50% of the previous slide, but the recovery has stalled since then. Additionally, in prediction markets tied to the U.S. elections, pro-crypto Republican Candidate Donald Trump has been losing ground to rival Kamala Harris, adding another layer of uncertainty to the market outlook.

In conclusion, while the recent price action has sparked optimism in the crypto market, analysts like Kuptsikevich remain cautious about the short-term prospects for Bitcoin, citing technical indicators and external economic factors as potential drivers of future price movements.