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The first cryptocurrency in market value fell to $26,160 before press time, hitting the lowest since March 17, according to data from CoinDesk. Prices are down more than 12% since May 6, decoupling from the rise in traditional risk assets like the Nasdaq.
The BTI indicator, which measures the directional momentum and strength of bitcoin price, moved from bullish to neutral on Thursday. The indicator has consistently signaled an upward trend since January 13, except for the brief 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 down.
“It appears that there is ‘paper-thin’ liquidity right now, even in majors such as BTC. While we can’t point to a direct reason for the weakness, any medium to large supply drives the market lower” , Dibb said.
Liquidity or market depth has recently deteriorated on major exchanges, including Binance, making it difficult for traders to execute large orders without influencing prices.
According to Dick Lo, founder and CEO of TDX Strategies, a quantity-focused crypto trading firm, the downward move could accelerate if traditional risk assets fall.
“We could get some downside acceleration IF U.S. stocks also start reversing,” Lo told CoinDesk. “$25,200 is key support for BTC, followed by $23,100 on potential downward acceleration.”
Lo added that the bearish bias would be invalidated if prices break above $28,500.
As analysts warned last week, bitcoin’s drop to a two-month low confirmed a bearish head and shoulders reversal pattern on technical charts. The breakdown opened the doors for a deeper slide towards support around $25,000.
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Sources 2/ https://www.coindesk.com/markets/2023/05/12/btc-slips-to-2-month-low-as-coindesks-bitcoin-trend-indicator-sheds-bullish-bias/?outputType=amp The mention sources can contact us to remove/changing this article |
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