2023-5-12 13:50 |
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 SupportAfter 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.
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.
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 WaryAs 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.
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.
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.
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