The risk of bitcoin falling to $ 27,000 to $ 25,000

Currently, most of the technical indicators in the long-term and medium-term views of Bitcoin are declining, and it is likely that the price will continue to fall to support between $ 27,000 and $ 25,000.

To Report International market traders Kevin Desk were mainly concerned with reducing the risk of their portfolios yesterday, which led to falling stock prices and digital currencies.

The US Consumer Cost Index (CPI), one of the main benchmarks for measuring inflation in the United States, grew by 8.6 percent from May last year (May 1400) to May this year (May 1401). Experts had previously expected inflation to fall to 8.2 percent this month from 8.3 percent in April. The price of bitcoin fell by $ 500 after the announcement of inflation last month.

Typically, when inflation rises, investors also try to reduce their portfolio risk or trading, and this is not just a matter for the US market. According to research by Deutsche Bank Germany, the average annual inflation rate around the world is now estimated at 7.9 percent, while in June last year (June 1400) this figure was equal to 3.5 percent.

The bank wrote in its latest research:

The impact of rising US inflation on global markets has somewhat diminished; However, yesterday’s fall in international markets was shocking in its own way.

The S&P 500 fell yesterday as gold, one of the longest-held assets against inflation, plummeted. US Treasury bond yields have returned to above 3%, partly due to investors’ readiness to raise bank interest rates.

Bitcoin has lost nearly 4% of its value in the last 24 hours, and Atrium has experienced a 6% decline during this period. Other market coins, which are considered higher risk assets, performed worse than Bitcoin on Friday. This clearly shows the declining willingness of digital currency market investors to take risks.

The Bitcoin Fear and Greed Index has returned to the “intense fear” range and reversed its slight uptrend over the past few days. The downside sentiment of traders has been steady over the past month, and this has caused some buyers to stay away from the market during this period.

Technical indicators are currently showing a weak bitcoin price trend in the short term and similar situation can be seen on various stock charts.

Katie Stockton, director of Fairlead Strategies, said of the bitcoin price situation:

The risk of a fall again to the long-term support of $ 27,200 for Bitcoin has increased. Momentum indicators (referring to RSI and MACD) also show a deeper fall in the medium and long term.

Risk of falling into support between $ 27,000 and $ 25,000

Bitcoin fell to $ 33,000 two weeks ago before reaching resistance; An event that indicates a loss of uptrend and a reduction in the likelihood of a continued price recovery.

The bitcoin market has been almost volatile over the past week and there has been a balance between supply and demand. Initial support for the price is at the level of $ 25,000, which is almost in the same area with the price floor on May 12 (May 22). The price acceleration on the overnight chart has slowed down over the past few weeks, indicating that the multi-month downward trend in bitcoin, which began in November (November 1400), could continue in the short term. In general, a downtrend is a situation in which new price floors are lower than their counterparts and new price peaks are lower than their previous peaks (downtrends and downtrends).

The next support is the 200-week moving average price, which is now at $ 22,249, followed by the next bitcoin support at $ 17,673; A level that is 78% away from the historical peak of Bitcoin.

The Relative Strength Index (RSI) has entered a saturated state on a weekly basis, indicating that market pressure may be easing in the coming weeks.

The level at which the RSI enters the sell-off area may not indicate the final bottom of Bitcoin; Especially when we are in a long-term downtrend. However, a short-term increase in the upward acceleration in the 14-week relative strength index can help traders determine when to change a possible market trend; Like what happened in April 2020 (April 1399) and August last year (August 1400).

The chart below shows the periods in which the relative strength index has changed its trend from descending to ascending. In this image, the downtrend is highlighted in red and the uptrend is highlighted in gray. It should be noted that most of the momentum indicators are currently in a downward position.