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Why is the Bitcoin (BTC) Price Dropping? Is This Something to Worry About?
Bitcoin’s latest bearish weekend has left investors concerned about the token’s future trajectory. The cryptocurrency, which had been trending upwards, took a sudden downturn, leaving many wondering what could be causing this drastic change in momentum.
As of late, the Bitcoin price has been trading within a rising parallel channel. However, it has now breached this channel, sparking concerns that the rally may have lost steam. This pullback was initially seen as a minor retracement to attract fresh buying volume. However, the intensity of this correction has raised alarms about the next course of action for the BTC price.
An in-depth analysis reveals that the daily chart appears to be bearish at the moment. The rally’s failure to breach the bullish pattern raises questions about the token’s resilience moving forward.
The Moving Average Convergence Divergence (MACD) indicator suggests a drop towards the interim support level around $92,000. Furthermore, it is crucial to note that the MACD had previously signaled a bullish crossover, but the rapid bearish crossover has validated this significant pullback.
On the other hand, the On-Balance Volume (OBV), a volume-based indicator, remains bearish and continues to plummet while the price rises towards new highs. This signals that any potential rebound from $92,100 would not invalidate the bearish trajectory but instead keep the token in a bullish range.
The absence of smart money participation in this price movement further reinforces the notion that a breakdown has already occurred. This is due to the fact that the breakout to new highs was merely a false one.
As we move forward, investors should be cautious as the levels around $92,100 may prove pivotal. Failure to rebound from these levels could signal the beginning of a fresh bear market for Bitcoin, potentially leading it to support zones between $88,900 and $89,700.
It is essential to closely monitor the situation, considering the current uncertainty in the market. The Bitcoin price’s unpredictability leaves room for multiple scenarios, and investors should be prepared for any potential outcome.
In conclusion, this downturn raises several red flags for investors. However, the lack of decisive action from smart money participants has led some to speculate that this could be a buying opportunity. Only time will tell if these concerns are justified or if Bitcoin’s price will recover.
Source: coinpedia.org
