Bitcoin prices have experienced a significant decline in recent weeks, falling over 12% from its value of about $26,160 on May 6. This worrying dip has been confirmed by CoinDesk's Bitcoin Trend Indicator, which recently shifted from a bullish bias to a neutral reading for the first time in three weeks. Matthew Dibb, the chief investment officer at Astronaut Capital, noted that this decrease in price appears to be due to low liquidity. This lack of depth is readily apparent across exchanges like Binance, where traders have found it difficult to execute large orders without negatively affecting prices.
It would appear that this downward trend may continue if traditional risk assets start to head south. According to Dick Lo, the founder and CEO of quant-driven crypto trading firm TDX Strategies, $25,200 is expected to be a key support for BTC, with the possibility of falling to $23,100 if there is further decline. Lo added that a rise above $28,500 would invalidate any bearish bias.
The current drop has triggered a "head-and-shoulders bearish reversal pattern" on technical charts and has exposed an opportunity for a decline as far down as $25,000. This would be concerning for bitcoin holders and could indicate a potential long-term drop in value. Of course, these predictions should be taken with a degree of caution, given the general unpredictability of the cryptocurrency market.
Sophie Young
- 2023-05-12
BTC Price Declining: Low Liquidity, A Bearish Bias
Bitcoin prices have been falling significantly in recent weeks, with low liquidity and a bearish bias primed to drive prices down even further. This article looks at the rising risk associated with BTC and examines the possibility of a long-term drop in value.
