Bitcoin is currently trading below the 200-day simple moving average (SMA). The 200-day SMA has been signaling SELL for the last 200 days, since Dec 28, 2021.
The price of Bitcoin is currently below the 50-day SMA and this indicator has been signaling SELL for the last 85 days, since Apr 21, 2022.
The most recent Death Cross in the Bitcoin market happened 182 days ago, on Jan 14, 2022. Meanwhile, a Golden Cross last occurred on Sep 15, 2021, which was 303 days ago.
Based on our technical indicators, Bitcoin's 200-day SMA will drop in the next month and will hit $32,535 by Aug 14, 2022. Bitcoin's short-term 50-Day SMA is estimated to hit $20,137 by Aug 14, 2022.
The Relative Strength Index (RSI) momentum oscillator is a popular indicator that signals whether a cryptocurrency is oversold (below 30) or overbought (above 70). Currently, the RSI value is at 47.08, which indicates that the BTC market is in a neutral position.
Reasons for the drop in Bitcoin value
-Crypto, especially BTC, came to the market intending to challenge the traditional financial system. It was the result of the global financial crisis in 2008-9, and its creator had the aim to protect its users from the impacts of the recession. It offered an alternative system, i.e., decentralized finance.
-It has taken a decade to implement the system, but hasn’t been able to challenge the traditional system. Thus, its mainstream adoption has been one of the main reasons it has seen a consistent drop in the current scenario.
-The country of origin of BTC and where it found its major investments was the US. There it saw opportunities for its growth as people invested. It took over a decade to consolidate its price, as it crossed $60K in November 2021. US investors comprise a significant part of investments in this coin. If they divest their capital, it will impact the BTC market.
-The same happened in the closing quarter of 2021 and the following months in 2022. The US inflation rates rose terribly as Federal Reserve made desperate attempts to control the situation. It didn’t happen, and the inflation rates are still soaring high. Thus, Bitcoin has continued to suffer, dropping its price value to the $20.7K range on 16 July 2022.
-The strained geopolitical situation globally due to the Russia-Ukraine conflict has continued to impact Bitcoin. It was performing relatively better till the invasion of Ukraine by Russian forces. Though BTC tried to hold fast to its previous position, it didn’t happen, resulting in a free fall.
-The situation came to control later, but the gradual loss in value continued. The result has been a more than $15K loss in Bitcoin price value. Thus, it would need stability in global politico-economic changes to improve its value. The current situation has little chance of happening, and Bitcoin might lower further.
-BTC value has seen a consistent drop in value. Various factors have contributed to the loss in value. These include US inflation, global political instability, fluctuations in traditional markets, etc. Thus, all these factors must be considered to understand why Bitcoin is facing problems.
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