Bitcoin’s Market Outlook: Bullish Recovery or Bearish Decline?

Bitcoin’s Market Dynamics: A Bullish Recovery or a Bearish Trend?

Bitcoin (BTC) has shown a remarkable rebound from its recent dip below $50,000 observed last Monday, reigniting bullish sentiment across the cryptocurrency landscape. This resurgence has led to optimistic projections, with some analysts suggesting that BTC could rally to levels of $90,000 or even higher. However, not all market experts share this bullish outlook.

One such skeptic, Alex Kuptsikevich, a senior market analyst at FxPro, predicts a short-term decline, anticipating a drop of approximately $5,000 from the current market rate, which hovers around $58,500. Kuptsikevich expressed his concerns, stating, “Bitcoin is likely to fall by $5K rather than rise by the same amount.”

The basis for Kuptsikevich’s bearish sentiment lies in Bitcoin’s inability to sustain gains above the $60,000 mark following the appearance of the death cross—a technical indicator formed when the 50-day simple moving average (SMA) crosses below the 200-day SMA. He noted, “Bitcoin does not break above $60K and faces selling pressure after it attempted to surpass the 50- and 200-day MAs late last week, indicating seller dominance.”

Adding to his analysis, Kuptsikevich highlighted that the 14-day relative strength index (RSI) has moved out of oversold conditions, suggesting potential for further declines. The RSI is a momentum oscillator that gauges the speed and change of price movements; an RSI reading below 30, which was observed following last Monday’s crash, typically signals oversold conditions, often foreshadowing a pause in the downward trend and a possible price recovery.

Kuptsikevich elaborated, stating, “The RSI index on the daily timeframe has exited the oversold territory, diminishing momentum for any further upward strength.” He emphasized that the likelihood of short-term weakness in Bitcoin’s price could heighten, especially if the upcoming U.S. consumer price index data for July, set to be released on Wednesday, reveals persistent inflation. Such a scenario could undermine expectations for potential interest rate cuts by the Federal Reserve in the near future.

Bitcoin did manage to rally above the $60,000 threshold late last week, recouping over 50% of the losses incurred during the five-day decline leading to August 5. However, the recovery seems to have stalled, particularly as pro-crypto Republican candidate Donald Trump appears to be losing ground to rival Kamala Harris in prediction markets linked to the upcoming U.S. elections scheduled for November 4.