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The price of Bitcoin has started to move in the feared direction after the monthly closing, and today it has made its second move towards a critical support level. Closing below $28,800 for the king of cryptocurrencies is quite risky. Many experts have been saying for days that closing below $29,500 would indicate the end of the uptrend. The common target was $28,800, and now it has been achieved.
Why Are Cryptocurrencies Falling?
The losses in Bitcoin’s price are pulling down the rest of the market, as always. While some altcoins are focused on resistance tests with news flow, BTC has started to decline. This was expected. We have seen that after periods of shallow volatility, Bitcoin tends to start with a big move in both directions. Now, it seems to be heading downwards.
Finding the reason for the drop is easy. Let’s take a look at the significant developments that occurred before the drop.
- The Financial Times published a report stating that the SEC ordered Coinbase to halt all trading pairs except BTC before filing a lawsuit.
- Curve Finance experienced a hack over the weekend, resulting in a total loss of approximately $47 million. Even worse, investors were concerned about potential hacks due to a code bug.
- The US dollar index (DXY) started to rise after the latest Fed statements and accompanying data. This was already a clear negative situation for the risk markets.
- Genesis is expected to present a clear payment plan tomorrow. If the company fails to reach an agreement with its creditors, it could lead to billions of dollars’ worth of cryptocurrency flooding the market.
- The SEC was supported by the judge overseeing the Terra case. In the recent ruling, sales on the secondary market were considered securities, contrary to Ripple‘s summary judgment.
- The monthly closing was below $29,250, supporting a downward technical breakout.
Will Bitcoin and Altcoins Rise?
From a technical perspective, the cryptocurrency market’s valuation is testing a reliable short-term support level around $1.12 trillion and is poised for a jump towards $1.18 trillion, which has been a resistance since March 2023. To support this optimistic scenario, Bitcoin’s price needs to close above $29,250.
However, if the cumulative value of cryptocurrencies sees a stable closing below $1.12 trillion, it could drop towards the 200-day exponential moving average around $1.09 trillion in August. This resembles the performance in May and June earlier this year. If Bitcoin closes below $28,800, it could test the $28,300 and $26,000 regions. For the opposite scenario, the levels of $29,250, $29,500, and $29,750 need to be reclaimed.
