Bitcoin (BTC) fell to a 2-month low as CoinDesk’s Bitcoin Trend Indicator turned neutral

The top cryptocurrency by market cap fell to $26,160 before press time, hitting its lowest since March 17, according to CoinDesk data. Prices have fallen by more than 12% since May 6, decoupled from the rise in traditional risk assets such as the Nasdaq.

The BTI indicator, which measures directional momentum and strength in bitcoin’s price, turned from bullish to neutral on Thursday. The indicator consistently signaled an uptrend since January 13, except for the short red flash (downtrend signal) in mid-March and the neutral reading on April 24.

According to Matthew Dibb, chief investment officer at Astronaut Capital, low liquidity appears to have helped few sellers drive prices lower.

“There appears to be ̵[ads1]6;paper thin’ liquidity right now, even across majors like BTC. While we can’t point to a direct cause for the weakness, any medium to large supply is driving the market down,” Dibb said.

Liquidity or market depth has recently worsened on major exchanges, including Binance, making it difficult for traders to execute large orders without affecting prices.

According to Dick Lo, founder and CEO of quant-driven crypto-trading firm TDX Strategies, the downside move could accelerate if traditional risk assets turn lower.

“We could get an acceleration on the downside IF US stocks also start rolling over,” Lo told CoinDesk. “$25,200 is key support for BTC followed by $23,100 on potential downside acceleration.”

Lo added that the bearish bias would be invalidated if prices rise above $28,500.

As analysts warned last week, bitcoin’s fall to two-month lows has confirmed a head-and-shoulders bearish reversal pattern on technical charts. The breakdown has opened doors for a deeper candle against support around $25,000.

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