Key Points
- Bitcoin has seen a drop below its 200-day moving average, indicating a potential further decline.
- Market indicators suggest bearish sentiment among long-term investors and less capital inflow.
Bitcoin, often referred to as BTC, has shown extreme volatility in recent months.
After reaching a local high of $70016 in July, it has struggled to maintain an upward trajectory.
Despite attempts to reverse the trend over the past week, the momentum has not been sustained.
Current Market Status
At the time of writing, BTC was trading at $58093, marking a 0.40% decline over the past day.
Similarly, the cryptocurrency’s trading volume fell by 19.90% to $29.7 billion in the past 24 hours.
This market indecision has led market analysts to predict a further decline before a reversal.
Crypto analyst Ali Martinez suggests a drop to BTC’s realized price of $31500, based on its 200-day moving average.
Market Sentiment and Historical Context
When Bitcoin trades above its 200-day moving average, it typically indicates strong returns.
However, when it falls below this level, it often signals a sustained decline.
Given that it has traded below $64000 over the past month, a potential drop to its realized price of $31500 is suggested.
Historically, when BTC falls below its 200-day moving average, prices tend to drop shortly after.
However, when BTC breaks above this trendline, prices often surge.
Other indicators also suggest a potential decline.
Bitcoin’s long-term holders SOPR has been on a declining channel since August 29th, indicating bearish sentiment among long-term investors.
Additionally, Bitcoin’s Fund Flow Ratio has declined over the past month, suggesting less confidence among investors.
Based on current market sentiment, BTC is positioned to decline to $54147 in the short term.
However, a breakout from this trendline could push prices up to $64727.
