Bitcoin Market Analysis

The recent price fluctuations in Bitcoin have captured the attention of traders and investors. Bitcoin encountered a bearish trend, breaching vital support levels in the preceding week. Despite hints of a bullish formation, the market's perception has been clouded by rising fear levels, with the fear and greed index reflecting a significant increase in fear.

Of particular concern is the sustained closure of Bitcoin's price below the 200-day Moving Average (MA), marking a deviation from previous trends.

Key Factors Driving Bitcoin Sell-Off

The recent downturn in Bitcoin's price is attributed to various factors, notably the heightened selling pressure from large holders. The decision of the German government to divest its Bitcoin assets by selling coins worth over $85 million has been a significant contributor to the selling spree. Concurrently, the sluggish demand for US-based spot Bitcoin ETFs and the accelerated selling by BTC miners for covering operational expenses have added selling pressure.

The market is keenly watching for signals from the US Federal Reserve, expecting guidance on potential interest rate adjustments later in the year. Speculation on an upcoming rate cut, alongside the impending general election, is seen as a catalyst for a positive trend in the cryptocurrency space. Furthermore, the optimistic performance of major stock indexes has reinforced positive sentiment.

Forecast for Bitcoin Price Movement

Bitcoin's price trajectory shows the formation of a bullish flag in recent months, hinting at the possibility of achieving a new historic peak before the end of the year. Analysts, including Benjamin Cowen, emphasize the significance of reclaiming the 200-day Simple Moving Average (SMA) to strengthen the chances of a bullish recovery by the fourth quarter.

Cowen predicts a surge in Bitcoin dominance to near 60% by the end of 2024, followed by a downturn in 2025, indicating a potential altseason on the horizon.