Bitcoin (BTC), the leading cryptocurrency by market capitalization, appears to be heading for further declines as market sentiment becomes increasingly bearish. A recent analysis shows that BTC is struggling to hold key support levels, and the general mood among traders and investors is shifting towards caution. Several factors, such as macroeconomic pressures, regulatory concerns and technical indicators, contribute to this negative outlook.
If Bitcoin remains under selling pressure, the potential for additional downsides becomes clearer. This article examines Bitcoin’s short-term price action for market participants looking to navigate the current volatility and make informed decisions about their BTC holdings.
Currently, the price of BTC is down -2.50% and is trading at around $67,796, with a market cap of over $1.3 trillion and a trading volume of over $29 billion at the time of writing. Although the market capitalization has fallen by 2.44%, trading volume has increased by 94.43% over the past day.
Technical analysis points to a further decline in the Bitcoin price
BTC on the 4-hour time frame has fallen below the 100-day Simple Moving Average (SMA) with strong momentum by dropping two bearish candlesticks. With such momentum, the price of BTC could fall even further.
The 4-hour RSI has also experienced a massive drop below 50%, close to the oversold zone. This confirms that BTC could still witness more price drops.
On the daily time frame, the price of BTC is making a significant decline towards the 100-day SMA with a huge bearish candlestick with strong momentum. Based on the price action above, it can be suggested that BTC may remain bearish for the rest of the day.
Finally, the 1-day Relative Strength Index (RSI) also suggests that Bitcoin’s price is likely to fall further, as the RSI line has fallen slightly below 50% and could continue to rise there for a while.
More losses for BTC?
Based on price analysis and what the RSI indicator suggests, if Bitcoin continues to decline, it will move towards the support level at $66,736. If it breaks this level, it will fall further to test the USD 64,515 support level. There is a possibility that the price could drop even further to test the $60,158 if the above-mentioned level fails to sustain the price.
However, suppose BTC decides to change course at one of the previously suggested support levels, then it will start rising towards the resistance level at $71,909. If the price breaks above this resistance level, it could move to test the $73,811 level and possibly go further to create a new all-time high.
Featured image from iStock, chart from Tradingview.com