As Bitcoin‘s (BTC) price inches closer to $26,000, the cryptocurrency continues to exhibit signs of weakness. At the time of writing, Bitcoin trades at $26,198, a 3.5% decrease, with a market capitalization of $511 billion.
Why is Bitcoin Falling?
Amid the current downward trend, Bitcoin is breaking beneath crucial support levels, indicating that the correction is far from over, and there may be more pain ahead. According to popular crypto analyst Ali Martinez, there’s a possibility that BTC’s price could slide to as low as $23,000. In his recent tweet, Martinez wrote:
Notice how Bitcoin seems to be losing all significant support areas. This situation increases the probability of a correction towards the next critical demand wall between $23,200 and $24,000, where previously 850,000 addresses bought 340,000 BTC.
The prevailing sell-off pressure on Bitcoin has escalated in recent hours, coinciding with a negative opening in the U.S markets. As the discussions regarding raising the debt ceiling extend into another day, all three major U.S indices have fallen by 0.7% as of writing.
As negotiations amongst U.S officials continue, investors grow anxious as the deadline in early June looms, bringing concerns about the possible outcomes and whether the U.S will default on its debt. This situation could potentially send shockwaves throughout the broader crypto market.
Is More Damage Looming for Bitcoin and Crypto?
Crypto analyst Michael Van de Poppe suggests that entering Bitcoin at this point may not be prudent.
Poppe stated: “It’s breaking downwards as $27,000 was not flipped, which likely means we’re going lower and will test $26,000. We are currently in acceleration mode, so we are waiting for a clear bullish divergence to appear for entry. The total market cap for crypto is entering the 200 Week MA and EMA areas. The moment of truth is approaching. There will be a downward break and some additional damage out there.”