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Recent fluctuations in the cryptocurrency market are reshaping investors‘ expectations. Although Bitcoin’s rapid recovery from levels below $50,000 last week has led many analysts to optimism, some experts warn of a potential short-term decline. FxPro’s senior market analyst Alex Kuptsikevich states that Bitcoin is more likely to experience a $5,000 drop than a similar increase.
Selling Pressure Increases
Bitcoin attempted to rise above the $60,000 level but failed to break this resistance. This indicates that sellers dominate the market.
Kuptsikevich notes that Bitcoin failed to sustain its gains following the “death cross” bear signal, formed by the intersection of the 50 and 200-day simple moving averages (SMA), confirming the dominance of sellers.
RSI Index Signals Decline
The 14-day relative strength index (RSI) exited the oversold zone, signaling a loss of momentum. This could indicate a new wave of price decline. The RSI index is a momentum oscillator that measures the speed and change of price movements.
After the decline last Monday, the RSI remained below 30, indicating oversold conditions, which could have paused the downtrend and led to a price recovery. However, Kuptsikevich remains skeptical about the sustainability of this recovery.
Inflation Data Will Be Decisive
The upcoming release of the US July consumer price index data could be decisive for Bitcoin’s short-term price movements. If inflation data exceeds expectations, it could dash hopes for Federal Reserve (Fed) rate cuts and trigger a new wave of selling in Bitcoin.
Last week, Bitcoin rose above the $60,000 level but failed to hold these levels, and the recovery process seems to have stalled. Expectations regarding the US elections and the approach to cryptocurrencies are expected to have a significant impact on the market.
The uncertainty in the cryptocurrency market is exacerbated by Republican candidate Donald Trump, known for his supportive statements on cryptocurrencies, trailing behind his opponent Kamala Harris.
