Prior to the weekly close on July 10, Bitcoin (BTC) hit a three-day low as $21,000, which had served as short-term support, failed.
Data indicated that BTC/USD was giving up some of its early-week gains while still trying to reach its greatest weekly gains since March. At the time of this report, the pair was around $20,850, some $1,600 below the 200-week moving average’s peak for the week.
Bitcoin provided some analysts reason for cautious optimism before the start of the new week, despite the breakout not continuing. Forex trader Tony, while thinking about it, anticipated that a new sideways phase would arrive before a deeper decline, which “would drive everyone nuts.”
The macroeconomic environment was still unstable, and the unrest in Sri Lanka added to the unease caused by the shared worldwide theme of the energy, food, and financial crises. The U.S. dollar index (DXY), which surged to new highs not seen in twenty years, was the centre of attention. It had ended the week back on support.
In the meantime, the Reserve Risk indicator provided a fresh important signal for BTC traders looking for a golden purchasing opportunity. “There is a recipe for a turnaround, and it might happen pretty quickly. When no one is looking, invest. When everyone is buying, they sell.
An analyst Michaël van de Poppe summarized. “The markets are showing higher timeframe bullish divergences and the sentiment is the same as at a funeral,”
Why is the price declining?
- The quantity of vendors and the order books filling up are the key factors driving the price of Bitcoin down. When demand exceeds supply by a large margin, as is the case when order books are fully booked, prices rise.
- The overexcited ICO sector is another element that has contributed to the recent decline in Bitcoin prices. People are selling their positions because they are worried that if they wait too long or don’t buy now, they will miss out on a significant market movement.
- When there is too much market manipulation, the price of bitcoin falls. Many people want to sell their Bitcoin, but the issue is that nobody is interested in buying them.
What to expect
Despite trading at over US $21,000 at the time of writing, Bitcoin, the biggest cryptocurrency in the world, has had difficulty maintaining these levels. In the past few weeks, it has been consistently falling below the US$19,000 threshold every few days. Cryptocurrency experts predict that the coming months could be terrible for Bitcoin investors if it cannot hold its support levels at US$19,000 per coin.
If the current support levels are not maintained, Bitcoin’s price may drop to and stay in the area of US$14,600. Some seasoned Bitcoin analysts, however, predict that Bitcoin’s price might finally fall to as low as US$5,000 by the end of the year.