Bitcoin (BTC) closed on a bearish note last week, slipping below the crucial support level of $56,500 to $61,466. Despite the flagship cryptocurrency forming a macro bullish flag, mild panic has entered the market, increasing overall fear. Early Monday during the European session, Bitcoin hovered around $55,422, causing the fear and greed index to drop further to 28, indicating heightened fear.
For the first time since October, Bitcoin has consistently closed below the 200-day Moving Average (MA) for the past five days. This persistent bearish sentiment is partly due to increased selling pressure from whales.
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German Government Sell-Offs & Miner Sales
The German government has been offloading its Bitcoin holdings in recent weeks. Despite reports of a potential Bitcoin buyback by the German government over the weekend, the country sold coins worth over $85 million on Sunday. In addition, U.S.-based spot Bitcoin ETFs have seen low demand, while BTC miners have ramped up selling to cover operational costs.
Lack of Economic Clarity
The crypto industry is on edge, awaiting economic clarity from the U.S. Federal Reserve later this week. An anticipated interest rate cut later this year, amid the upcoming general election, is expected to trigger a bullish outlook for cryptocurrencies. Furthermore, major stock indexes have maintained a bullish trend recently, which could positively impact the crypto market.
Bitcoin has been forming a weekly bullish flag over the past four months, which could lead to a new all-time high later this year. Popular crypto analyst Benjamin Cowen suggests that Bitcoin must reclaim the 200-day SMA as a support level to increase the chances of a bullish recovery in the fourth quarter.
Cowen also predicts that Bitcoin’s dominance will rise towards 60 percent in the coming months before reversing next year, paving the way for the much-anticipated altseason.
Bullish flag or bearish breakdown? What’s your outlook for Bitcoin in the coming months? Let us know.
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