Bitcoin Faces Bearish Pressure Amidst Divergence and Falling Hash Rate
Bitcoin’s price is under threat as bearish divergence appears, alongside decreased hash rates and waning market engagement. Recent job creation data has prompted declines in American equities and rising bond yields, suggesting a hawkish Fed stance. Technical indicators point to a potential bearish breakout, with critical support levels established, but a bullish pennant could offer hope if price remains above $90,000.
Bitcoin price remains precariously positioned as it trades within a narrow range of $94,296, influenced by several macroeconomic factors and technical indicators suggesting a potential decline. The latest employment report from the Bureau of Labor Statistics indicated the creation of over 256,000 jobs, which has led to a subsequent downturn in American equities, with notable declines in the Dow Jones and Nasdaq 100 indices. In the bond market, a continued sell-off has pushed the 30-year yield to 5.0%, while the 10- and 5-year yields have also experienced increases. The rising yields imply a market anticipation of a sustained hawkish stance from the Federal Reserve, commonly impacting risk assets like Bitcoin and altcoins negatively.
Additionally, recent on-chain data from IntoTheBlock indicates a decrease in Bitcoin’s hash rate to 750 TH/s, down from a 30-day high of 911.88 TH/s. This decline in hash rate coincides with Bitcoin’s stagnant price performance, reflecting diminished miner activity and possible waning interest among traders. This is further corroborated by a decrease in active Bitcoin addresses, which have fallen from 900,000 to approximately 775,000, suggesting some traders have begun to offload their holdings. Notably, total outflows from all spot Bitcoin ETFs reached $572 million over just two days.
The technical landscape for Bitcoin indicates a heightened risk of a bearish breakout. The daily chart reveals the prominence of a head and shoulders pattern, with a critical neckline established at $90,952. This is one of the most widely recognized bearish formations in trading. Moreover, the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) likewise exhibit bearish divergence, with MACD histograms falling below the zero threshold. Consequently, a breach of the neckline at $90,950 could trigger further declines, with the first support level projected at the 200-day moving average of $78,285, followed closely by $73,985, which represents last year’s peak in March. Despite these bearish signals, Bitcoin has also been suggested to be forming a bullish pennant on its weekly chart, conditional on maintaining levels above $90,000, thus signaling a potential for upward movement if these levels are sustained.
Bitcoin, the leading cryptocurrency, has been experiencing volatility affected by numerous external factors, including economic indicators, regulatory developments, and market sentiment. Its price dynamics are largely driven by the interrelationship between supply and demand, miner activity as reflected in hash rates, and broad market conditions influenced by macroeconomic reports such as employment figures and bond yield changes. Technically, traders utilize various chart patterns and indicators to predict price movements, looking for signs of bullish or bearish trends that could inform their trading strategies.
In summary, Bitcoin is currently facing significant risks of a bearish breakdown as indicated by technical patterns and declining hash rates, alongside adverse macroeconomic conditions. With pressures building from the bond market and decreasing trader engagement, Bitcoin could see further declines if it fails to maintain key support levels. Traders remain vigilant to the charts, as any further movements around the $90,000 mark could dictate near-term price trajectories, influencing both investor decisions and market sentiment.
Original Source: crypto.news
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