Bitcoin continued its downhill movement on Thursday, dipping to a low of $106,623. It marks its third consecutive day of price decline, but its trajectory may change.
The 2-hour chart reveals an ongoing buyback attempt by the bulls at the time of writing. It started in the past hour as investors shrugged off the negative sentiment across the market.
Several bullish fundamentals were announced on Wednesday, which many believe will have a positive impact on prices. One such is the consumer price index, which revealed lower-than-expected values. The readings indicated a lower chance of inflation, reducing the fear that investors had a few months ago.
However, basic necessities are seeing massive increases. Utility Gas surged by over 15% in May, Car Insurance inflated by 7%, and repair costs soared by over 5%. Other sectors that directly affect the public rose, increasing the odds of inflation.
Nonetheless, the drop in the U.S. dollar Index may be a trigger for the latest decline. DXY dipped to a low of 97.6 earlier on Thursday but rebounded. The BTC price correlation with the instrument saw it react in line with the trend.
However, another reason for the latest decline could be due to growing fear of decreased odds of a rate cut. Historically, a drop in DXY results in dwindling interest rates, almost eliminating the need for the Federal Reserve to cut it.
Data from Glassnode pointed out some positive metrics amid the ongoing decline. Bitcoin remains above critical short-term basis levels. Its 1-week CB is at $106.2k, while its 1-month CB is at $105.2k. A slip below these levels may set it up for more price declines.
Taker Buy Dominant
Readings from CryptoQuant show the apex coin seeing notable buying pressure at the time of writing. The market indicators reveal that the spot taker CVD is positive as taker buys are dominant. The futures retail activity is green as retailers resume market participation. Futures taker CVD indicates that these traders are rallying the market as they increase buying pressure.
However, there are indications of more bearish action on the derivatives market. Open interest dropped by over 2% as funding rates saw a similar decline. Exchange flows are significantly negative as the exchange reserves are rising. More investors are moving assets into trading platform to take profit. Their volume outweighs the outflows.
Bitcoin is experiencing a significant surge in selling pressure across several key regions. The Coinbase and Korea premium index are negative at the time of writing.
Bitcoin May Flip $106k
Bitcoin’s staying above $106k may be shortlived as the indicators on the one-day remain negative. The relative strength index is on the decline as it dips lower with increasing selling pressure. The average directional index quantifies the downward pull, indicating further price declines.
MACD flipped bullish a few days ago, displaying a positive crossing. It changed its trajectory a few hours ago, printing sell signals as the 12 EMA slips lower, intercepting the 26 EMA as the bearish convergence nears completion.
All highlighted metrics hint at further decline. Bitcoin will slip below $106k within the next 24 hours if the selling congestion continues. It may rebound around $103k due to notable demand concentration.
