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Bitcoin’s price is falling below $28,000, nearing the $27,000 support level. Should it break below this, it could result in a further decline to $25,500. Bitcoin’s bearish momentum has also pulled it below the 100 hourly Simple Moving Average and $28,200 pivot level. A bearish trend line has formed with resistance near $28,150 on the hourly chart of the BTC/USD pair, and the price is currently facing resistance near $27,750. Should Bitcoin fail to clear the $28,150 resistance, its price could continue to decline, with immediate support at the $27,250 level.
This article originally appeared on www.newsbtc.com
The world of cryptocurrencies is filled with constant ups and downs which challenge even the most experienced traders. In recent days, a bearish trend seems to have taken over the cryptocurrency market with Bitcoin, the world’s largest cryptocurrency by market capitalization, also experiencing significant drops.
Bitcoin’s price has dipped from over $64,000 in April to around $32,000 in June 2021. The market has responded to this price movement with speculations and concerns about the future of cryptocurrencies. Many analysts are questioning whether this is just a correction or a renewed downtrend.
A correction is generally considered a temporary and healthy retreat in the value of cryptocurrency. It allows traders and investors to take profits, buy back in at lower prices, and then ride out the next uptrend. Corrections, therefore, are often viewed by seasoned traders as an opportunity to enter the market at a discount.
On the other hand, a renewed downtrend is a more prolonged, bearish period of the market, during which prices continue to decline. Renewed downtrends can last for weeks, months or even years, and are often the result of larger market trends, economic downturns or government regulations.
Right now, it’s still not clear whether Bitcoin’s current price movement is a renewed downtrend or a correction. However, cryptocurrency analysts have suggested several potential catalysts that could have contributed to the recent dip in prices.
One of the catalysts believed to be contributing to this dip is the involvement of environmental concerns in cryptocurrency mining. Environmental concerns raised about Bitcoin mining have led to some investors selling off their Bitcoin holdings, as they perceive the currency as having a high carbon footprint. Furthermore, there has been pressure from regulators and governments to reduce the carbon footprint of cryptocurrencies, ultimately leading to more sell-offs.
In the past, China has been the hub of Bitcoin mining, and it is estimated that over 65% of the world’s Bitcoin mining operations are based in the country. However, China recently cracked down on Bitcoin mining and trading, leading to an exodus of miners to other countries. The relocation of Bitcoin miners has contributed to some of the sell-offs in the market.
Finally, the rise of regulatory concerns has contributed to Bitcoin’s recent dip. Over the past year, governmental regulators have become more vocal about the need to regulate cryptocurrencies. The push for more cryptocurrency regulation will likely lead to more sell-offs.
While there is no official confirmation about what’s causing the current trend, the fact remains; Bitcoin is in the middle of a major correction or uptrend. Traders need to be patient and wait for a clear trend to set in before making any significant investment decision. However, one thing is certain, Bitcoin is here to stay, and the technology is advancing rapidly. Despite the current headwinds, the cryptocurrency market is expected to surge in the long run.
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