Recent shifts in Bitcoin’s price have seen it hitting fresh daily lows beneath the $94,705 mark, signaling heightened market turbulence and sparking apprehension among investors over unexpected downturns and swift corrections. Cowen, a notable figure in market analysis, has raised alarms about the potential for further declines as Bitcoin’s value encounters more downward pressure. But what do these chart indicators reveal about the potential direction of Bitcoin?
What’s Driving Bitcoin’s Decline?
Bitcoin is showing pronounced weakness, edging towards the crucial $95,000 benchmark, with chart patterns indicating bearish tendencies. Daily and weekly statistics reflect a trend of depreciation, challenging Bitcoin’s ability to hold its ground. The focus of many investors, particularly in Asia, has turned to equities, while there is a notable trend of American investors heavily liquidating their positions.
The presence of specific patterns such as the “death cross” on Bitcoin’s charts has caught the attention of analysts. This formation is historically associated with identifying market troughs.
Cowen has noted the occurrence of a death cross in Bitcoin’s market today. Historically, these patterns have aligned with bottoms, provided the market cycles haven’t completed. If this cycle isn’t finished, a price rebound might be on the horizon.
However, Cowen advises caution, suggesting that if a rally does not materialize within a week, prices may fall further before aligning once more with the 200-day simple moving average (SMA).
“Trade according to the market as it is, not as you wish it to be,” Cowen advised.
How Are Other Cryptos Being Affected?
Both Bitcoin and altcoins like XRP are experiencing negative impacts, primarily due to tepid enthusiasm from South Korean investors and hesitation from those in the U.S. This shift is fueled by underlying factors and a consistent weak risk appetite that leads to significant sales by larger holders, sustaining the bearish market environment.
Market downtrends have been pronounced at the beginning of U.S. trading sessions, closely reflecting volatility patterns observed in Asian markets, where local trading activities establish equivalent support and resistance points.
DaanCrypto emphasized the significant role U.S. trading sessions have played, particularly during historical peaks and the current downtrends. Most of these movements align with active exchange-traded fund (ETF) hours in U.S. and European markets, suggesting notable trading volumes.
- •Recent XRP sales amount to nearly 200 million coins, highlighting market stress.
- •U.S. and European trading periods show higher activity, affecting market volatility.
- •The death cross may suggest potential bottoms if the cycle isn’t yet closed.
The prevailing atmosphere indicates an uncertain path forward. While patterns like the death cross offer potential hope, the market remains precarious, underscoring the necessity for strategic trading based on current conditions rather than future expectations. As investors navigate these turbulent times, the dynamics of trading hours and broader macroeconomic factors will play pivotal roles in shaping outcomes.