Bitcoin’s (BTC) Value Could Fall Below $50K Again: Discover Why
The cryptocurrency market has experienced a 1.6% growth in the past 24 hours, reaching a total value of $2.08 trillion. Despite this increase, there has been a recent sell-off from a peak of $2.15 trillion, hovering around the midpoint of the last 30 days. While prices have gone up since yesterday, there is a noticeable trend of selling as prices rise. The market sentiment index has risen to 31, indicating more fear compared to the previous day’s index of 25.
Bitcoin’s recent recovery from levels below $50,000 initially sparked hopes for a bullish trend, with expectations of reaching $90,000. However, senior market analyst Alex Kuptsikevich from FxPro offers a more cautious outlook, suggesting that Bitcoin might see a $5,000 decline rather than a similar rise.
Kuptsikevich’s cautious stance is based on various technical factors. Bitcoin has faced resistance at $60,000, and the possibility of a “death cross,” where the 50-day Exponential Moving Average (EMA) falls below the 200-day EMA, indicates potential downside risks. This pattern could lead to stronger selling pressure than buying interest, resulting in further declines. Notably, the last significant death cross for Bitcoin occurred on September 12, 2023, causing a price drop to $24,900. However, Bitcoin later recovered and reached new highs above $70,000 by March 2024, indicating that while the death cross can signal downturns, they are not guaranteed.
The 14-day Relative Strength Index (RSI) is another crucial factor to consider. After Bitcoin’s sharp decline last Monday, the RSI signaled an oversold condition, hinting at a possible price recovery. However, with the RSI now showing signs of weakness, the risk of further decline remains high.
Looking ahead, upcoming economic reports, particularly the U.S. Consumer Price Index (CPI) data scheduled for Wednesday, could impact Bitcoin’s short-term outlook. The CPI figures will offer insights into inflation trends, potentially affecting expectations for Federal Reserve rate cuts and overall market sentiment, subsequently influencing Bitcoin’s price.
Political dynamics also contribute to the uncertainty surrounding Bitcoin’s performance. Changes in election predictions, such as pro-crypto candidate Donald Trump losing ground to Kamala Harris, could introduce market volatility. The interplay between political shifts and economic data may further shape Bitcoin’s near-term performance.
In conclusion, while Bitcoin’s recovery from below $50,000 initially sparked optimism, technical indicators point to potential risks. The presence of a death cross, a weakening RSI, and the upcoming CPI data suggest a cautious outlook. Moreover, political developments could sway market sentiment and impact Bitcoin’s price trajectory.
