Recent fluctuations in the cryptocurrency market have significantly altered investors‘ expectations. Despite Bitcoin‘s swift rebound from below $50,000 last week, optimism among analysts is tempered by warnings of a possible short-term decline. According to FxPro’s senior market analyst Alex Kuptsikevich, Bitcoin is more likely to experience a $5,000 drop than a comparable increase.
Why Is Selling Pressure Increasing?
Bitcoin’s recent attempt to rise above the $60,000 threshold was unsuccessful, reflecting the market’s seller-dominated nature. Kuptsikevich notes that Bitcoin’s failure to maintain gains following the “death cross”—a bearish signal formed by the intersection of the 50 and 200-day simple moving averages—confirms this dominance.
What Does the RSI Index Indicate?
The 14-day relative strength index (RSI) has exited the oversold zone, suggesting a loss of upward momentum and a potential new wave of price decline. The RSI, a momentum oscillator that gauges the speed and change of price movements, remained below 30 last Monday, indicating oversold conditions that could have temporarily halted the downtrend and led to a minor recovery. Despite this, Kuptsikevich remains cautious about the recovery’s durability.
Key Indicators to Watch
• The upcoming US July consumer price index data release could be pivotal for Bitcoin’s short-term price movements.
• Inflation data surpassing expectations may deter hopes for Federal Reserve rate cuts, triggering more Bitcoin selling.
• Bitcoin’s inability to sustain levels above $60,000 indicates possible further price declines.
• Political developments, especially the US elections and candidates’ stances on cryptocurrencies, are expected to significantly impact the market.
The upcoming release of US July consumer price index data could be critical for Bitcoin’s short-term price dynamics. Should the inflation data exceed forecasts, it could diminish hopes for Federal Reserve rate cuts and initiate another wave of Bitcoin selling. Last week’s rise above the $60,000 level was short-lived, with the recovery now appearing stalled. Market sentiment is also influenced by the US elections, where the stance on cryptocurrencies by candidates like Donald Trump and Kamala Harris could play a significant role.
