Just a few weeks ago, bitcoin looked poised to run through the $10,000 and confirm a new bull market. Wednesday, the largest digital currency was drubbed and fell to the $7,600 area, a decline that some traders believe confirms rapidly deteriorating technicals for the alt-coin.
Bitcoin does not lack for supporters as there have been plenty of bullish calls on the cryptocurrency in recent weeks. Some crypto market observers have opined bitcoin could reach new highs this year, but those are just projections. In financial markets, price matters and bitcoin’s price has rapidly eroded since the start of May.
Why Bitcoin Has been Unimpressive
“Notably, the five-month moving average (MA) has rolled over in favor of the bears and looks set to cut the 10-month MA from above – a bearish crossover that hasn’t been seen since June 2014,” reports CoinDesk. “If that occurs it could be a worrying signal for the long-term price outlook. Back then, following an identical crossover in June 2014, the cryptocurrency subsequently dropped by 70 percent (from $580 to $166) in the seven months leading up to January 2015.”
Other Cryptos Are Tumbling Too
Bitcoin is not the only digital currency that has recently tumbled. On Wednesday, 19 of the 20 largest alt-coins by market value lost ground. Of those 19, at least 17 were down 10% or more at some point during Wednesday’s U.S. trading session.
“This time around, the bearish crossover will likely occur at the turn of the month, if bitcoin extends the current decline towards the $7,000 mark, and would open the doors for a deeper sell-off towards the $5,000 mark,” according to CoinDesk.
Some cryptocurrency market observers believe that if bitcoin can make it back to $10,000, rallies fromt there could be significant. Recently, the Bitcoin Dominance Index has been rising, confirming the dominant perch of the cryptocurrency, but that view is severely impaired in the near-term, particularly if bitcoin continues flirting with $7,000 on the downside.
“BTC risks deeper pullback towards $7,000. In such a case, the 5-month MA will cross the 10-month MA from above, signaling a bearish crossover and opening doors for a drop to $5,000,” according to CoinDesk.
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