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Bitcoin More Likely to Fall by $5K Than Rise by Same Amount: Analyst
The BTC market shows signs of seller dominance, FxPro's analyst said.
Updated Aug 13, 2024, 12:15 p.m. Published Aug 13, 2024, 11:42 a.m.
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- The BTC market shows signs of seller dominance, FxPro's analyst said.
- BTC's recovery has stalled with Harris pulling ahead of Trump in prediction markets.
Bitcoin's swift recovery from the sub-$50,000 price seen last Monday has restored bullish sentiment in the crypto market, spurring calls for a rally to $90,000 and higher.
One analyst, however, sees renewed losses in the short term, with the price falling by $5,000 from the going market rate of around $58,500.
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"Bitcoin is likely to fall by $5K rather than rise by the same amount," Alex Kuptsikevich, senior market analyst at FxPro, said in an email.
Kuptsikevich's bearish take stemmed from bitcoin's failure to keep gains above $60,000 in the wake of the death cross, a bearish 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," Kuptsikevich noted.
He added that the 14-day relative strength index (RSI) no longer shows oversold conditions, which means scope for another leg lower, consistent with the recent seller dominance above $60,000.
The 14-day RSI is a momentum oscillator that measures the speed and change of price movements. An RSI below 30, observed after last Monday's crash, indicates oversold conditions, often presaging a pause in the downtrend and price recovery.
"The RSI index on the daily timeframe has moved out of oversold territory, losing momentum for further strength," Kuptsikevich said, explaining his bearish take.
The probability of short-term BTC price weakness will likely increase if the U.S. July consumer price index data, due for release Wednesday, shows sticker inflation, dashing hopes for Fed rate cuts in the coming months.
Bitcoin bounced to levels above $60,000 late last week, retracing over 50% of the slide seen in the five days to Aug. 5. Since then, the recovery has stalled with pro-crypto Republican Candidate Donald Trump ceding ground to rival Kamala Harris in prediction markets tied to the outcome of the U.S. elections due Nov. 4.
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