Bitcoin Price Crash Looming as Death Cross Emerges, Analyst Warns of $5,000 Decline

In the past 24 hours, the cryptocurrency market has increased by 1.6% to reach $2.08 trillion. However, a recent sell-off from a peak of $2.15 trillion

The cryptocurrency market saw a rise of 1.6% in the past 24 hours, bringing the total market cap to $2.08 trillion. However, the recent sell-off from a peak of $2.15 trillion, which marks the midpoint of the past 30 days’ range, has put a damper on the gains.

Despite an overall increase in cryptocurrency prices compared to the previous day, there’s a clear selling trend as prices climb. The market sentiment index has also risen to 31, indicating fear, up from 25 the day before.

Bitcoin’s recent rebound from sub-$50,000 levels initially sparked hopes for a bull run, with expectations of reaching $90,000. However, Alex Kuptsikevich, senior market analyst at FxPro, offers a more cautious outlook, suggesting that Bitcoin might experience a $5,000 decline rather than a similar rise.

To understand Kuptsikevich’s bearish stance, let’s delve into the technical factors at play.

Bitcoin Price Crash Looming

Bitcoin has faced difficulties breaching the $60,000 resistance level. However, the fear of a death cross, indicated by the 50-day Exponential Moving Average (EMA) crossing below the 200-day EMA, suggests further downside risks. This crossover often indicates that selling pressure may outweigh buying interest, suggesting further declines.

Interestingly, the last significant death cross for Bitcoin occurred on September 12, 2023. This pattern initially led to a price drop to $24,900, but Bitcoin rebounded and reached new highs above $70,000 by March 2024. This shows that while the pattern can signal downturns, it doesn’t guarantee them.

Another technical indicator to consider is the 14-day RSI, which has recently exited oversold territory. After Bitcoin’s sharp drop last Monday, the RSI indicated an oversold condition, typically signaling a potential for price stabilization or recovery. However, with the RSI now losing strength, the potential for a further decline remains significant.

Impact of Upcoming Economic Data

The short-term outlook for Bitcoin could be influenced by upcoming economic reports, specifically the U.S. Consumer Price Index (CPI) data. Scheduled for release on Wednesday, the CPI figures will provide insights into inflation trends. Higher inflation could dampen hopes for Federal Reserve rate cuts, impacting overall market sentiment and Bitcoin’s price.

Political and Market Sentiments

Bitcoin’s recent price recovery has been unfolding against a backdrop of shifting political scenarios. The latest updates from the U.S. presidential election markets show a decline in support for Donald Trump, a pro-crypto Republican candidate, while Kamala Harris continues to gain ground. This changing landscape could introduce new elements of uncertainty into the market.

The interplay between political developments and economic data could further affect Bitcoin’s short-term performance and price movements.

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