The chart above shows that Bitcoin flashed three major bearish signals as it fell to a daily low of $56,719 on Thursday. Firstly, $56,719 BTC's lowest level price levels over 127 days, dating back to February 28. It also shows that Bitcoin is now down more than 10% from its weekly timeframe peak recorded on Monday.
But more importantly, the chart shows that BTC is now trading below the critical 200-day simple moving average (SMA) price level. When an assetโs price falls below a long-term moving average price support, bears effectively control the short-term market momentum.
As expectations of a rate cut by the US Federal Reserve seem unlikely following recent statements by Fed chief Jerome Powell, bearish sentiment around Bitcoin and cryptocurrency markets could grow in the coming days.
Rachael Lucas, a cryptocurrency analyst at Australian exchange BTC Markets, noted the importance of breaking below the $60,000 resistance line as it represents a psychological barrier for many investors, suggesting that if Bitcoin remains below this level, it could lead to increased volatility in the short term.
Whale investors and the US and German governments are abandoning BTC
The cryptocurrency's recent volatility has been attributed to payments to creditors of the defunct cryptocurrency exchange Mt. Gox, as well as major sales organized by the US and German governments.
