Bitcoin is currently experiencing high selling pressure as market dynamics shift. Cryptocurrency has faced a serious risk in rising with global market development, bringing about cautious views among various market participants. Some formations that have come into view in technical analysis may signal a downward trend. Indeed, this shows indicative implications for investors watching both technical indicators and macroeconomic data.
Notable Risks in Bitcoin Market Technical Analysis
Firstly, the technical interaction existing between Bitcoin and some market indices, such as the Nasdaq composite and S&P has touched notable levels. This analysis indicates that a downturn formation called the “Death Cross” is becoming clearly visible on the chart. This, compared to a similar movement in the past, undoubtedly signals an increased downward risk for the market.
Furthermore, the entry of $80,000 in the market stands out, making investors carefully observant whether the price will test this level or not. Also, there is a visible weakening in the technical indicator which shows the ongoing of short-term directional searches. This is all a result of the adoption of cautious positions by investors due to uncertain price movements.
Macroeconomic Data
- Liquidity Tightening
Bitcoin is not influenced by technical analysis alone but also by some economic data. There has been a significant tightening of the global money supply in the past few weeks, making it a clear factor affecting the cryptocurrency market. This has drawn the attention of some popular analysts like Ali Martinez, who has emphasized that investors need to reassess their liquidity expectations during this period. According to Ali,
“Bitcoin miners have sold approximately 2,400 BTC in the past week, generating a movement worth $220 million”.
- U.S.A. Core PCE Data
According to the previous release of personal consumption expenditure, data shows that inflation pressures continue. This builds up expectations that the US Federal Reserve will not act hastily regarding interest rate cuts. Additionally, a decrease in S&P 500 futures signals a decreasing interest in risky assets.
Bitcoin Criticized
As usual, Bitcoin made a shocking attempt to climb up to $90,000 but ended with a swift retreat. This highlights a strong resistance point present in the market. These uncertainties have made investors embrace Gold.
Bitcoin has received criticism in this Bearish phase from some critics like Peter Schiff, who made a lashing statement,
“If you believe Bitcoin is digital gold, think again.”
Funny enough, the above statement can sometimes be perceived to be the truth by those wanting to give cryptocurrency a try. This leaves them on the verge of falling off the track but Bitcoin enthusiasts believe that the chase is still on.
Although the common relationship between Bitcoin and traditional market instruments is more visible during the stage of high volatility, necessitating cautious short-term investment choices.
