Bitcoin started trading on July 25 at $65k but experienced one of the biggest declines in the last fourteen days. It was heading for a more 3% losses but halted its declines as the buyers staged a buyback. The largest cryptocurrency is trading above its opening price.
What Caused the Dip?
The exact reason for the decline is still hazy, and there are several speculations. However, one possibility is that the dip is connected to the US stock market. A look at the latest bitcoin correlation with some traditional stocks reveals similar traits.
The chart above shows that the price correlation was at its highest on July 22. Price have closely mimicked each other’s movement. Due to this, fundamentals that affect either the S&P or Nasdaq100 are bound also to affect BTC, hence the price drop.
Fears of a possible recession are plaguing the US and affecting investors. Due to this, some are selling their stock. Aside from the highlighted stocks, other publicly traded companies also saw a notable decline in value in the last 24 hours
Another reason for the drop could be heightened concerns about the ongoing legal battle against Tether and Bitstamp. The SEC recently started an investigation into both firms with some evidence in court. A victory for the regulators will spell more decline for the crypto market.
In either case, the apex coin recovery may spell more goodwill in the coming days. However, the most recent price action does not move indicators.
Bitcoin Next Price Action is Uncertain
The apex coin’s latest recovery comes amidst growing speculation of further price drops. It also sparked hope of a possible continuation of an uptrend and flipping further resistance.
However, indicators do not show this sentiment. For example, the moving average convergence divergence is silent. The 12-day EMA has halted its uptrend and is moving in parallel. Nonetheless, the 26-day EMA maintains its upward trajectory, which may indicate an ongoing bearish convergence.
Nonetheless, the relative strength index is showing considerable change in trajectory. The metric was heading downwards but has since recovered and starting an uptrend. The most recent trend is indicative of the growing buying pressure the coin is seeing.
If the latest trend continues, the coin may see further price increases in the coming days. Nonetheless, the largest cryptocurrency is trading above its pivot point, a few hours after it retraced below it. The mark is critical support, and the bulls will look to continue trading above it. BTC may attempt the next level, which is the first pivot resistance at $70k.
In the Coming Days
Bitcoin peaked above the 23% Fibonacci retracement a few hours ago. If the bulls continue the most recent surge, they may decisively flip this critical level. This will offer more room to defend another very important support.
However, if the selling continues, BTC veers close to testing the 38% Fibonacci retracement level around $60k. The bulls may defend another critical level in the coming days before such test happens. It may struggle to break $64k. It remains to be seen if this happens.
