Bitcoin is at risk of another sell-off after its price fell beneath a key moving average on Nov. 15, as a relatively strong performance by traditional assets caught investor attention.
According to Jeff Dorman, CIO at Arca, an investment management firm dealing in digital assets, BTC’s drop in price is inversely correlated to the strength of global markets, including record highs of the DJIA, this week.
- Strong performances in traditional assets and a lack of new reasons to buy crypto is suppressing BTC’s price.
- A loss of the 50-day moving average exposes the $8,000 price level.
- The daily RSI shows that momentum slowing, which could hint at greater selling pressure in the short term.
“Volumes are low, no new money is coming into the ecosystem, and stocks, bonds and gold are all up double-digits year-to-date which makes the non-crypto world lose focus”, Dorman said.
At 14:00 UTC, BTC fell 2.1 percent breaking through the 50-day moving average (MA), flagging potential for a deeper drawdown from Oct. 25’s peak of $10,350.
The loss of the 50-day MA means the price of BTC could fall through the $8,000 level, and, if combined with a looming long-term bear cross of the 100 and 200-day MA’s, could confirm a long-term bearish indicator.
In addition, the RSI, a measurement of trader momentum and sentiment, did not exceed the neutral line at 50.00 after falling beneath that point on Nov. 10, hinting at greater selling pressure for next week.
Total daily volume has remained flat since Nov. 12, meaning that there has been no new reason to buy or sell.
Dorman said trader sentiment today has less to do with negative events and more to do with a lack of positive catalysts, but the case for the bulls remains strong.
“For Bitcoin, trying to time it perfectly is risky”, he said.