Bitcoin price dropped further by 6.1% in the last 24 hours to trade at $55,475 during European business hours on Friday. The decline follows that of the global stock market, which seems to be in recovery mode. The NASDAQ, DOW, and S&P 500 indices saw 1.09%, 0.67%, and 0.31% upticks, respectively. Meanwhile, Solana price broke below a key trendline but remains safe as long as it’s above $121.
Bitcoin Price Analysis Shows Temporary Support at $50,000
Bitcoin price broke down through a crucial multi-month support level and closed below it yesterday, confirming the fears of many market participants. Due to the ensuing market panic and increasing sell pressure, Bitcoin price also broke through the 200-day simple moving average (SMA). Bitcoin is now officially bearish.
The BTC relative strength index (RSI 14) also broke below its moving average (MA) and is currently in the oversold region at 25. Market participants expect increasing bearish momentum, potentially over the weekend and into next week.
The future of Bitcoin price lies in the hands of the $50,000 support level, although it is a weak one. The market imbalance between $44,000 and $47,000 seems to be the magnet pulling the price down, and BTC price may drop to this level before bouncing back up.
The Bitcoin Fear & Greed Index fell from 44 (FEAR) to 29 (FEAR), signaling the increasing uncertainty among market participants. Furthermore, data from Santiment also shows historic levels of FUD in the crypto market, with the keyword “sell” hitting a yearly high on June 4, 2024.
On the other hand, Solana price shows impressive resilience in the wake of a Bitcoin sell-off. The asset dropped by 8% from $135 yesterday to $125 today, maintaining above the $121 key support akin to Bitcoin as other altcoins suffer double-digit drops.
Although this is a dangerous place to be, Solana has a lot more going for it fundamentally.
Solana price prediction shows the asset has a higher chance of breaking this key support level due to Bitcoin’s volatility. If this happens, Solana may find support around $100.
Why is Bitcoin Price Crashing?
In the past couple of weeks, the United States and German governments have moved a sizable amount of seized BTC to crypto exchanges, according to data from Arkham Intelligence. Market participants remained cautious as they anticipated a sell off soon.
Furthermore, Mt. Gox, the infamous crypto exchange that collapsed following a hack in 2014, has finally begun plans to refund its victims. The company has moved over $2.7 billion worth of Bitcoin from cold storage, sparking fears that recipients might rush to sell off their refunds to lock in gains. Additionally, the ongoing decline in Bitcoin’s value may be attributed to the cascading effect of market panic.
Bottom Line
Bitcoin price fell 6% despite a recovery in stock markets, signaling the crypto’s unpredictable behavior in relation to TradFi assets. This divergence between crypto assets and equities shows the complex dynamics at play in today’s interconnected markets.
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Frequently Asked Questions (FAQs)
MT. GOX stands for Magic: The Gathering Online Exchange.
Approximately 850,000 Bitcoin (BTC) were stolen from Mt. Gox during the hack in 2014.
As of now, Binance is considered the largest cryptocurrency exchange in the world by trading volume.
