Background Information
Although the Bitcoin market has recently shown signs of bottoming out, some cryptocurrency strategists warn that the price of Bitcoin could still fall back by 8%, mainly due to market uncertainty and hints from technical analysis indicators.
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technical analysis
Support and Resistance: Bitcoin is currently forming a strong support level around $30,000. However, the resistance above is between $35,000 and $40,000. If these resistance levels cannot be broken, the market may face correction pressure.
Relative Strength Index (RSI): The RSI indicator shows that Bitcoin may be overbought, which is usually a sign of a price pullback. Overbought conditions mean that recent buying power is strong, which may lead to selling pressure in the short term.
Moving Averages (MA): The crossover of the 50-day and 200-day moving averages also provides a reference for market trends. If the Bitcoin price falls below these key moving averages, it could trigger further declines.
Market factors
Macroeconomic environment: Global macroeconomic uncertainties, such as inflationary pressures and changes in central bank monetary policy, may have an impact on the Bitcoin market. Investors’ risk aversion may lead to capital outflows in the short term.
Regulatory risk: The ever-changing regulatory policies of various governments on cryptocurrencies may affect market sentiment. For example, the regulatory trends of the U.S. Securities and Exchange Commission (SEC) and policy changes in other countries may have a significant impact on Bitcoin prices.
Market Sentiment: Although some investors remain optimistic about Bitcoin’s long-term prospects, short-term market sentiment fluctuations may lead to price corrections. Market sentiment is often influenced by news, social media, and market dynamics.
Strategist's View
Some cryptocurrency strategists suggest that investors should remain cautious and prepare for a possible price correction, noting that despite the long-term bullish outlook, short-term market volatility and technical indicators suggest that Bitcoin prices could see a correction of around 8%.
in conclusion
Although the Bitcoin market shows signs of bottoming out, it may still face an 8% correction risk. Investors should pay attention to technical indicators and market dynamics, remain cautious, and adjust investment strategies according to market changes.
