Last week, Bitcoin’s price dropped by almost 10%, striking a major blow to the cryptocurrency market. Losing the crucial support level at $60,000 has further worried traders.
10% Drop in a Week
Last week, Bitcoin’s price dropped by almost 10%, striking a major blow to the cryptocurrency market. Losing the crucial support level at $60,000 has further worried traders. When major support zones are breached, traders might lose patience, leading to additional selling pressure.
Volume Momentum Indicator
Recent analysis by popular trader Ali revealed a concerning trend with the Volume Momentum Indicator for Bitcoin. This indicator shows a sustained decline in exchange-related on-chain activity, which typically points to lower investor interest in Bitcoin and decreased network usage.
Market Implications
The Volume Momentum Indicator measures the rate of change in the volume of Bitcoin being transferred to and from exchanges. A decline in this indicator suggests that fewer people are moving their Bitcoin to exchanges, which could imply a decrease in trading activity or a shift towards holding rather than selling. When this indicator shows a sustained drop, it often correlates with periods of reduced market interest and can precede further price declines. However, it’s important to note that no single indicator can predict market movements with certainty, and other factors should always be considered when analyzing Bitcoin’s price trajectory.
The decline in exchange activity and the loss of the $60,000 support level may lead to additional pressure on Bitcoin’s price. While indicators can provide useful signals, it is important to consider them within the context of the broader market picture.
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