Does The Bitcoin Price Dump Signal The Start Of Another Bear Market?
May 12 2023 - 6:50AM
NEWSBTC
The last two days have been especially rocky for the Bitcoin price
as it has fluctuated heavily between trying for a recovery and then
crashing even further. As a result of this, the price of the
digital asset has revisited the $26,000 level once more and the new
bearish trend may point to more decline for the cryptocurrency.
Bitcoin Loses $27,000 Support After a rollercoaster response to the
CPI data release, the price of Bitcoin had reclaimed $27,000 and
the bulls quickly tried to establish support above $27,000. This
level would hold for about a day, but by Thursday, bears made easy
pickings of it, dragging the price of BTC down to as low as
$26,200. Related Reading: Matrixport Report: Here’s What Happens To
Bitcoin If Inflation Continues To Fall This decline in price has
dragged the cryptocurrency to dangerously bearish levels. One of
these is the fact that it is now trading below its 50-day moving
average. For a digital asset like BTC, maintaining its 50-day SMA
is important, especially if the asset is going to see an upside in
the coming days. BTC returns to $26,000 level | Source: BTCUSD on
TradingView.com However, as this trend continues, it will not be
surprising to see BTC lose footing above its 100-day MA. If this
happens, then the digital asset could be in free fall for a while
which could see it return to the $20,000 level. Unless there is a
sudden turn in investor sentiment, the bear market may have
returned in full bloom. Crypto Investors Becoming Wary As the price
of Bitcoin has suffered, so has the sentiment of investors moved
into the more negative territory. BTC’s rise above $31,000 brought
the Fear & Greed Index to a high of 69 in April. However, there
has since been a shift in how investors have been looking at the
market. Over the last three weeks, the Fear & Greed Index has
shown a 20-point decline which puts the market back into neutral
territory. While this level is not necessarily bad when taken at
face value, the fact that the index has declined from greed back to
neutral is concerning. Fear & Greed Index turns neutral |
Source: alternative.me If anything, this decline indicates that
investors are becoming more wary of the market. When things like
these occur, it means that investors are not willing to put money
into the market. Volumes decline as a result of this and price fall
in response to the lack of momentum. Related Reading: Total Number
Of Shiba Inu Addresses In Profit Drops As Market Braces For Impact
Currently, support for BTC lies at $26,000 which is shaky at best.
Unless there is a significant accumulation of the digital asset
over the coming days, then the weekend which is characterized by
low volumes and volatility could prove detrimental for the
cryptocurrency At the time of writing, BTC is changing hands at a
price of $26,291, down 4.22% in the last 24 hours. Follow Best Owie
on Twitter for market insights, updates, and the occasional funny
tweet… Featured image from iStock, chart from TradingView.com
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