Despite widespread expectations, the recent drop in the price of bitcoin to $25,000 has made traders and investors wary about taking on new positions. The general mood in the cryptocurrency market is still negative, which is made worse by predictions of a further decline to $20,000 before any meaningful reversal in the price of BTC takes place.
Because of the lack of activity, which is frequently seen after downturns, Bitcoin has been stuck around the $26,000 level. Bulls have set up shop below $25,000 on the downside in an effort to avert a prolonged drop, while attempts to climb toward $27,000 have only reached $26,282.
beginning of the BTC price Bull Runs Occur Despite Great Fear
Experts in the cryptocurrency market are familiar with the cycles of Bitcoin, which are frequently correlated with halving occurrences, the next of which is slated for April 2024. These cycles include times of joy and times of anxiety, which signify the beginning of corrections or bull runs, respectively.
@DrProfitCrypto stated that “the previous bull run in late 2020 kicked off with profound fear during the pandemic and a substantial crash.”
With the selloff brought on by the epidemic, Bitcoin rose parabolically to fresh all-time highs of $69,044.
The trader and analyst continued, “Bear markets frequently start with euphoria while bull markets frequently start with intense fear.”
However, time is what sets successful bull run investors apart from others who purchase at the height of exuberance. A successful method for steadily raising the value of digital assets over time is to buy when the market is declining.
However, very few investors have the courage to buy during protracted market downturns like the current one.
Similar thoughts are expressed by the cryptocurrency analytics platform Santiment, which claims that while “traders hope for market declines to secure Bitcoin at discounted prices, many hesitate when confronted with the actual chance to capitalize on the dip.”
Future Outlook for Bitcoin Price
With sharp drops to $20,000, Bitcoin’s perilous position at $26,000 teeters on the edge. Without a guarantee against losses over $20,000, investors are concerned that these downturns could endanger their investments.
As it continues to decline into negative territory, the Moving Average Convergence Divergence (MACD) urges sellers to retain their positions. Early in July, when the blue MACD line crossed below the red signal line, a sell signal was generated. This signal was reaffirmed last week, which led to the sell-off.
Another breakdown is expected to occur if bears manage to keep Bitcoin’s value over $26,000. Bulls may have a chance to stop a more significant down to $20,000 in favor of a comeback around $22,000 thanks to support from the descending trendline seen on the chart.
Although the structure of the cryptocurrency market is deteriorating, historically, recovery have taken place when uncertainty is at its highest.
The Relative Strength Index (RSI) is considerably oversold in this situation at 20, which is lower than it was during the 2020 Covid meltdown. When Bitcoin is oversold, it is trading below its true market value, which frequently results in large price recovery. Given the pressing circumstances involved in such situations, it is advisable to use care and to be ready to act quickly.