Bitcoin is hanging by a thread, as selling pressures increase and major cryptocurrency cryptocurrencies are forced to revert back to their critical support levels. If the bulls don’t step up and stop this bearish push, then crypto number one could fall back to the bottom.
At the time of writing, Bitcoin’s (BTC) price trades at $21,400 with a 9% loss and an 11% loss in the last 24 hours and 7 days, respectively. Ethereum continues to outperform BTC’s price as it has been able to hold on to part of the gains from last week, but bulls must draw the line at the resistance turned support on $1,700.
According to senior market analyst for Cubic Analytics Caleb Franzen, Bitcoin’s bearish momentum might be about to increase. The cryptocurrency is flashing a potential selling signal according to the 4-week Williams%R oscillator, an indicator used to measure an asset’s momentum.
According to Franzen, the Williams%R signifies that Bitcoin is now overbought. This chart illustrates that when this indicator is signaling oversold the Bitcoin price tends to trend downward.
This indicator has successfully predicted June’s 2021 major crypto crash when the price of Bitcoin dropped from a yearly high north of $64,000, and the most recent downside trend when BTC finally lost $40,000 and reached its lowest price in two years at $17,600. Analyst said:
When the 1-month W%R plummets from “overbought” to “oversold”, this has been a precursor for a larger decline and capitulation. Can this be different? Absolutely. However, it will not be easy to stop bear market momentum.
Franzen thinks $21,500 is a good level to set for potential support retests. If BTC’s price fails to retain these levels, the cryptocurrency might drop to $20,500 and $19,000 before seeing a rebound.
What’s Impacting The Price Of Bitcoin?
A number of macro-economic factors have been driving the selling pressure on crypto markets. They include U.S. Federal Reserve hiking interest rates and high levels inflation, which has reduced risk appetite in global markets. Recent developments have mitigated these risks.
However, economist Alex Krüger believes the attention has moved from the U.S. to Europe. This old continent is facing an energy crisis as well as the potential for economic decline across its major economies due to wars between Russia, Ukraine and Russia.
In the current macro conditions, Krüger believes only Ethereum might have a chance to continue outperforming due to the upcoming “Merge” on mainnet, the transition from Proof-of-Work to Proof-of-Stake. Krüger said:
Both equity risk and bad German data drove overnight, while crypto hit air pockets after consolidating at lows. Markets seem to be shifting from being focused on the Fed, to being more focused on Europe. This dump shows that ETH, and not positioning, is the most performing cryptocurrency asset.