Bitcoin continues to struggle as its price fluctuates between attempting a recovery and further declines. The past two days have been particularly difficult, with the digital asset’s price once again dropping below the $26,000 mark, suggesting a potential further decline for the cryptocurrency.
Following the release of CPI data, Bitcoin’s price had briefly recovered, reaching $27,000. However, the bears quickly took over, resulting in a drop to as low as $26,200 on Thursday, leaving the cryptocurrency dangerously poised for a downturn. One of the concerning trends is that the price is currently below its 50-day moving average. This is important for a digital asset such as BTC, especially if it wants to see an upward trend in the coming days.
If this trend continues, it wouldn’t be a surprise to see BTC lose ground above its 100-day moving average. This could result in the digital asset freefalling, potentially back to the $20,000 mark. Unless there is a sudden turnaround in investor sentiment, it seems that the bear market has returned in full force.
As BTC’s price has declined, investor sentiment has also turned more negative. The Fear & Greed Index, which reached a high of 69 in April after Bitcoin briefly surpassed $31,000, has declined by 20 points over the past three weeks, bringing it back to a neutral level. Although this level is not necessarily bad, the fact that the index has gone from greed back to neutral is cause for concern.
This decline suggests that investors are becoming more cautious about the market, which can translate to them not being ready to invest money in it. This can result in volumes decreasing, and as a result of the lack of momentum, prices dropping.
Currently, BTC’s support stands at $26,000, which is precarious at best. Unless there is a significant accumulation of the digital asset in the coming days, the weekend, which is characterised by low volumes and volatility, could prove harmful for the cryptocurrency.
At the time of writing, BTC is trading at a price of $26,291, representing a decline of 4.22% in the last 24 hours.