Bitcoin started the week with a seven-day low as the recent bullish trend in the cryptocurrency market began to fade. The stronger-than-expected U.S. non-farm payrolls report on Friday has raised concerns about the Federal Reserve’s viewpoint that inflation has reached its peak. Additionally, Ethereum also experienced a decline on Monday but managed to stay above the $1,600 mark.
This dip in the cryptocurrency market can be attributed to a variety of factors, including concerns about the increasing interest rates and a potential reduction in government stimulus. The stronger U.S. employment data has led to increased speculation that the Federal Reserve may start to taper its asset purchases, which would potentially result in higher interest rates and a decrease in liquidity in the financial market.
The week started on a rough note for Bitcoin (BTC) as it plummeted to a seven-day low due to a shift in market sentiment. The BTC/USD pair has now recorded a decrease for five consecutive sessions, with today’s drop bringing the prices down to $22,734.48.
This represents the lowest point for bitcoin since January 30th, when it was trading at $22,500, marking a new floor in its value.
The cryptocurrency market is known for its volatility and sudden shifts in sentiment can greatly impact the value of digital assets. In this case, it appears that market sentiment has turned negative, leading to a downward trend for Bitcoin.
Despite this setback, it is important to remember that the cryptocurrency market is still in its early stages and fluctuations in value are not uncommon
The world’s largest cryptocurrency, Bitcoin (BTC), seems to be moving towards a point of support again, as depicted in the chart. This conclusion can be drawn from recent declines in the value of BTC.
The cause of these declines can be attributed to the breaking out of a floor in the 14-day relative strength index (RSI) at 68.00, which is now at 61.15.
This reading represents the lowest level for the index in almost a month and follows an extended period where the cryptocurrency was in overbought territory. The relative strength index (RSI) is a widely used technical indicator that helps traders identify potential overbought or oversold conditions in an asset.
In this case, the RSI breaking out of the floor at 68.00 and moving towards 61.15 is a clear indication that the cryptocurrency has shifted from an overbought to an oversold position. This can be a sign for traders to exercise caution and potentially re-evaluate their positions in the market
Further Bitcoin Losses
If the price of Bitcoin fails to surpass the $23,220 resistance level, it may continue its downward trajectory. In such a scenario, the immediate support level to watch out for is near the $22,600 zone. This level has the potential to provide some stability to the price, but a break below it could lead to further declines.
The next significant support level is near the $22,500 zone, which could potentially act as a strong barrier to further losses. However, if the price were to break below this level, it could trigger a sell-off and lead to a move toward the $22,200 level. In the worst-case scenario, the price could potentially continue to drop and reach the $21,500 level in the near term.
The dip in the value of Bitcoin and Ethereum is a natural market correction and is not necessarily a sign of a larger trend. However, the cryptocurrency market remains highly volatile and unpredictable, and investors should exercise caution and carefully evaluate the risks before making any investment decisions. As always, it’s important to diversify portfolios and have a well-balanced investment strategy.
Ken Emmanuel is a Blockchain Content writer, a Web3 Enthusiast and a Social Media Management Strategist, he likes writing educative contents to help people gain more knowledge and get inspired. The growth of any organization he work with is always his priority. He is a Geographer by profession and loves reading.