The cryptocurrency has slipped below the 50 Exponential Moving Average (EMA), a key indicator often used by traders to determine market trends. This development signals a potential bearish phase for Bitcoin.
Source: Next on the horizon is the substantial support level provided by the 200 EMA. If Bitcoin dips below this level as well, it could potentially see a substantial drop toward $27,000, a level not seen since January 2021. The lack of any upward drivers at the moment only adds to the potential for such a bearish scenario.
Adding fuel to the fire, the network is experiencing a drop in inflows. This could indicate a lack of new investors or a pause in investments from existing holders, both of which are necessary to maintain price stability or trigger positive price movement. A decrease in network inflows is often a sign of diminished market interest and can lead to a drop in price.
Moreover, trading volumes, a significant indicator of market activity and investor interest, are also on a downtrend. This reduced trading activity often precedes a price drop and suggests bearish market sentiment.
Institutional investors, who have been a significant driver of Bitcoin’s growth in recent years, are also appearing to halt their inflows into the Bitcoin network. This trend aligns with the market’s dwindling expectations of a Bitcoin ETF getting approved soon, a development that has been anticipated by many as a major potential bullish catalyst for Bitcoin.
In conclusion, while it is impossible to predict with absolute certainty, the data suggests that Bitcoin could potentially be headed for a significant price drop. As always, it is crucial for investors to stay informed and make decisions based on a careful analysis of market conditions.
This article was originally published on U.Today
Source: Cryptocurrency - investing.com
