Sentiment towards crypto markets was also undermined by a discussion between Republican presidential candidate Donald Trump and Tesla (NASDAQ:TSLA) CEO Elon Musk on X, where the topic of crypto regulations was not brought up even once.
Bitcoin fell 1.6% to $58,910.2 by 08:17 ET (12:17 GMT).
The talk between Musk and Trump underwhelmed some market participants who were hoping that the Republican nominee would reiterate his support for crypto.
But while Trump has expressed support for the crypto industry- going as far as speaking at the Bitcoin conference last month- he has rarely mentioned crypto or Bitcoin when speaking at more mainstream events.
His talk with Musk was no exception to this trend, with bets on cryptocurrency betting platform Polymarkets showing that traders were positioning for some mention of crypto. Bitcoin also briefly fell to $58,000 after the talk.
Data from digital assets manager Coinshares showed on Monday that crypto investment products, mostly those exposed to Ether, saw strong inflows over the past week, as a steep rout in prices attracted a slew of bargain buying.
Ether products saw over $155 million in inflows, with buying also picking up after the underwhelming launch of spot Ether exchange-traded funds in U.S. markets last month.
Bitcoin saw only about $13 million of inflows.
Crypto markets were still nursing steep losses from last week, where souring risk appetite batted prices across the board. Bitcoin had fallen as low as $49,000, and was now rangebound between $50,000 and $60,000- a range seen for most of this year.
Despite recent recovery, one brokerage firm anticipates further headwinds for Bitcoin in the short term, predicting a drop of $5,000 from the current market rate.
“Bitcoin is likely to fall by $5K rather than rise by the same amount,” analysts at FxPro said in an email to CoinDesk.
The firm’s bearish outlook is based on Bitcoin’s inability to sustain gains above $60,000 following the death cross, a bearish signal formed by the crossover of the 50- and 200-day simple moving averages (SMA).
“Bitcoin does not break above $60K and faces selling after it tried to break above the 50- and 200-day MAs late last week, showing seller dominance,” analysts continued.
They also pointed out that the 14-day relative strength index (RSI) no longer indicates oversold conditions, which could pave the way for another decline, aligning with the recent seller dominance at levels above $60,000.
The RSI, a momentum oscillator that measures the speed and change of price movements, had shown oversold conditions after last Monday’s crash, which typically suggests a potential pause in the downtrend and a possible price recovery. However, as analysts explained, “The RSI index on the daily timeframe has moved out of oversold territory, losing momentum for further strength.”
The likelihood of short-term weakness in Bitcoin’s price may increase further if the U.S. July consumer price index data, set to be released on Wednesday, indicates higher-than-expected inflation, potentially undermining hopes for Federal Reserve rate cuts in the coming months.
Broader cryptocurrency traded largely flat on Tuesday, tracking Bitcoin’s rangebound performance.
World no.2 token Ether slipped 0.9% to $2,651.18. SOL, XRP and ADA rose between 0.3% and 2.4%.
Among meme tokens, DOGE lost 1.4%.
Markets were largely cautious ahead of key U.S. consumer price index inflation data, due on Wednesday, which is set to provide more cues on the Federal Reserve’s plans to cut interest rates.
Source: Cryptocurrency - investing.com
