Bitcoin Price Analysis Critical Levels Breached Analyst Forecasts a Recovery
Bitcoin faced a significant setback recently as its price dropped below key support levels and the 200-day moving average, a development not seen in months. In order to regain its momentum, Bitcoin will need to reclaim these crucial levels. Analyst Benjamin Cowen believes that while Bitcoin’s dominance will rise in the near future, it will eventually decline next year to make room for the growth of other cryptocurrencies.
Bitcoin closed on a bearish note last week, falling below the important support level of $56,500 to $61,466. Although the cryptocurrency has formed a macro bullish flag, the market has been gripped by mild panic, resulting in an overall increase in fear. During the European session on Monday, Bitcoin was trading around $55,422, causing the fear and greed index to drop further to 28, indicating heightened fear.
For the first time since October, Bitcoin has consistently closed below the 200-day moving average for the past five days. This persistent bearish sentiment can be attributed in part to increased selling pressure from large-scale investors.
There are several reasons contributing to the bearish pressure on Bitcoin. The German government has been selling off its Bitcoin holdings in recent weeks, with over $85 million worth of coins sold on Sunday alone. Additionally, U.S.-based spot Bitcoin ETFs have seen low demand, while Bitcoin miners have been selling their holdings to cover operational costs.
The lack of economic clarity is also affecting the crypto industry, as market participants await guidance from the U.S. Federal Reserve later this week. The anticipation of an interest rate cut later this year, coupled with the upcoming general election, is expected to create a bullish outlook for cryptocurrencies. Furthermore, major stock indexes have been maintaining a bullish trend, which could have a positive impact on the crypto market.
Looking ahead, Bitcoin has been forming a weekly bullish flag over the past four months, which could potentially lead to a new all-time high later this year. Analyst Benjamin Cowen suggests that for a bullish recovery in the fourth quarter, Bitcoin must reclaim the 200-day moving average as a support level.
Cowen also predicts that Bitcoin’s dominance will increase to around 60 percent in the coming months before declining next year, paving the way for the growth of alternative cryptocurrencies.
What are your thoughts on Bitcoin’s outlook in the coming months? Do you anticipate a bullish flag or a bearish breakdown? Let us know your opinion.