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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 be optimistic, some experts warn of a potential short-term decline. FxPro’s senior market analyst Alex Kuptsikevich notes that the likelihood of Bitcoin experiencing a $5,000 drop is higher than a similar increase.
Seller Pressure Increases
Bitcoin attempted to rise above the $60,000 level but failed to break this resistance, indicating sellers’ dominance in the market.
Kuptsikevich states that after the bearish signal known as the “death cross,” formed by the intersection of the 50 and 200-day simple moving averages (SMA), Bitcoin could not sustain its gains, confirming the sellers’ dominance.
RSI Index Signals Decline
The 14-day relative strength index (RSI) signaled a loss of momentum by exiting the oversold zone. This could indicate a new wave of price declines. The RSI index is a momentum oscillator that measures the speed and change of price movements.
After the decline last Monday, the RSI stayed below 30, indicating oversold conditions, which led to a pause in the downtrend and a price recovery. However, Kuptsikevich is still 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 interest rate cuts by the US Federal Reserve (Fed) 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.
Particularly, the uncertainty in the cryptocurrency market is heightened by Republican candidate Donald Trump’s lagging behind his opponent Kamala Harris, who has made headlines with his pro-cryptocurrency statements.
