Cryptocurrency Investors Fear These and Sell! Are They Wrong? - COINTURK NEWS
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Cryptocurrency Investors Fear These and Sell! Are They Wrong?

12:14 am (203 days ago)
May 17, 2023

May did not start well for cryptocurrency investors and it is not continuing well. Especially altcoins are experiencing annoying losses. What worries investors is that altcoins continue to melt down despite intermediate rises in Bitcoin price. There are a number of reasons for this, not the least of which is short-term investor sentiment.

Short-Term Investors Are Scared

Recent data suggests that short-term investors holding Bitcoin are leading the sell-off. This is only normal when there is massive FUD in the markets. On the other hand, we also mentioned that tens of thousands of BTC bought in January were sold in a short time. But why? There is an answer on the macroeconomic front. In the second part, we will touch on technical data.

Let’s remember January. Cryptocurrency investors were expecting an interest rate ceiling to be announced quickly this year. Inflation was falling and reaching the Fed target. But even though we are almost in the middle of the year, the Fed still does not paint an optimistic picture about the interest rate ceiling, let alone a rate cut. Speaking this week, Fed members openly said that they might hike in June.

– Inflation is falling.

– Credit tightening is creating market pressure equivalent to a rate hike.

– The interest rate, which was close to the 5.75% ceiling, hit 5.25%.

But still the Fed is not cutting rates. So what is the other big problem on the agenda? The biggest problem for the US is the risk of default. But investors are senselessly magnifying it as an insurmountable problem. The narrative that the US will default and stocks will crash is finding great traction. But to what extent is this possible?

All the Republicans are doing is squeezing the Democrats ahead of next year’s elections. Nothing else. Eventually we will see the debt ceiling raised before or close to June 1st. They will reach a deal. Even today, Republicans have said that they are close to a deal after the last meetings. Will this deal have a positive impact on cryptocurrencies? Time will tell, but investors are scared and that’s why cryptocurrencies are falling.

Shallow liquidity in the market? This is certainly a bigger problem than default for crypto, and volumes that have fallen to $29 billion per day are strengthening the hand of Bitcoin bears.

How Many Dollars Will Bitcoin Fall to?

Technical analysis on the daily timeframe predicts that the Bitcoin price is in a bearish trend. This is due to the formation and breakout of the head and shoulders, which is considered a bearish pattern. The pattern starts with a high point, followed by a higher high, and then a second high of similar length to the first one. Then, a decline occurs, which breaks the neckline and triggers a steep decline.

On the other hand, the Elliott Wave theory also confirms the impending decline in Bitcoin price. Accordingly, the Bitcoin price could fall as low as $23,400. If the BTC price closes below $25,270, this scenario will bring this scenario to the table. If BTC continues to close below $27,200, this scenario does not seem too far away.

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