Bitcoin may continue to come under pressure
According to Bloomberg analysis, the Moving Average Convergence Divergence (MACD) indicator has given a warning for the price of bitcoin. The MACD has flipped negative, which is a concerning sign for some analysts that Bitcoin may continue to come under pressure. Bitcoin has also fallen below its daily moving average (MA50) as a result of the recent bearish fall.
Another headwind for Bitcoin could be the U.S. dollar, which recently reached its highest level in more than a month. Bitcoin has always maintained an inverse relationship with the DXY Dollar index.
“At least in the medium term, bitcoin’s fortunes may still be tied to other long-term growth assets such as technology stocks, Jamie Douglas couts,” said an analyst at Bloomberg Intelligence.
During Friday’s sell-off, Bitcoin fell to a low of $20,782, shedding more than 11% as a result of risk aversion in global markets brought on by concerns over the Federal Reserve’s tightening monetary policy.
At the time of publication, bitcoin was trading at $21,300, up 2%.
Will the weakness in the Bitcoin price continue?
Glassnode notes in a recent report that the Bitcoin market recently underwent a wave of short-term relief with prices trading higher than the realized price for 23 straight days. However, weakness in underlying network activity has manifested in the latest sell-off, with prices falling once again below this key cost-basis level.
This explains the main reason why the weakness and subsequent rejection of the price from $24.4K below the true value is because investors in a variety of wallet-sized cohorts have decided to distribute during the last advance above the market’s average cost base level. decided to.
While the present market structure is undoubtedly similar to the late-2018 bear market, it still lacks the macro trend reversal in profitability and demand inflows necessary for a sustainable uptrend.
Therefore, the bottom of the ongoing cycle is most likely a consolidation phase, as bitcoin investors seek to build a stronger base that is subject to persistent uncertainty and adverse events on the macroeconomic background.
