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Bitcoin Faces Short-Term Weakness as Sellers Dominate
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Bitcoin's recent recovery above $60,000 has hit a roadblock, with signs pointing to short-term weakness as sellers take control. While the market had been hopeful for a continued rally, one analyst warns of potential losses in the near future.
BTC Recovery Stalls
After briefly dipping below $50,000 last Monday, Bitcoin's (BTC) price rebounded, restoring some bullish sentiment in the crypto market. This led to optimistic calls for a rally toward $90,000 and beyond. However, the momentum has slowed, and the price is now hovering around $58,500.
Analyst Predicts Price Drop
According to Alex Kuptsikevich, a senior market analyst at FxPro, Bitcoin is more likely to see a $5,000 drop than a rise of the same magnitude. Kuptsikevich attributes this bearish outlook to Bitcoin's inability to sustain gains above $60,000, especially after encountering the "death cross," where the 50-day and 200-day simple moving averages (SMA) cross in a bearish pattern.
"Bitcoin's failure to break above $60K and the subsequent selling pressure indicate a strong presence of sellers," Kuptsikevich said.
Momentum Indicators Signal Weakness
The 14-day relative strength index (RSI), a momentum oscillator that measures the speed and change of price movements, no longer indicates oversold conditions. This suggests that there could be room for another downward move. Last Monday's crash brought the RSI below 30, signaling oversold conditions, which often lead to a pause in the downtrend. However, as Kuptsikevich notes, the RSI has since moved out of oversold territory, losing momentum for further gains.
Market Sentiment and Economic Data
The probability of short-term weakness in Bitcoin's price could increase if the upcoming U.S. July consumer price index (CPI) data shows higher-than-expected inflation. Such a scenario could diminish hopes for Federal Reserve rate cuts in the near future, potentially putting additional pressure on Bitcoin.
