Bitcoin has witnessed a nearly 25% drop since reaching its all-time high of $74,000 in March. As of September 11, the cryptocurrency is trading at around $56,000, with several market indicators suggesting a further downturn in the coming weeks.
Death Cross Formation Suggests $50K Support
A significant bearish indicator for Bitcoin is the looming “death cross” formation on its daily chart. This pattern, where the 50-day exponential moving average (EMA) crosses below the 200-day EMA, has historically signaled extended price declines. For instance, a similar death cross in January 2022 led to a 60% drop in Bitcoin’s value.
BTC/USD daily price chart. Source: TradingView
Currently, BTC is nearing this critical formation, with analysts predicting a potential slide to $50,000 if the trend continues.
US Inflation Data and Fed Rate Cuts Could Provide Relief
Despite the bearish signals, some analysts remain optimistic. Michael van de Poppe anticipates that Bitcoin could recover following the release of August’s US Consumer Price Index (CPI) report. If Bitcoin holds above the $55,000–$56,000 support zone, it could rebound toward $60,000.
Fed swaps interest rate projections. Source: Bloomberg
The CPI report, expected to show a 2.6% year-on-year inflation rise, may also prompt the Federal Reserve to cut interest rates, potentially boosting the crypto market.
Yen Carry Trade Poses Additional Risk
Another threat to Bitcoin’s price comes from the unwinding of yen carry trades. With the Japanese yen appreciating against the US dollar, traders are moving out of riskier assets, including cryptocurrencies. If the yen continues to strengthen due to the Bank of Japan’s hawkish policies, Bitcoin could see further declines, particularly after the central bank’s meeting on September 19.
Source: X
In conclusion, while Bitcoin faces immediate bearish pressure, key factors such as US inflation data and Federal Reserve actions may determine whether it rebounds or falls further.
