Bitcoin, the largest cryptocurrency by market capitalization, has begun December on a bearish note, experiencing a decline of over 5% in the past 24 hours. Currently, Bitcoin is trading slightly above $86K after briefly dipping into the $85K range earlier today.
This downturn in Bitcoin”s price is not an isolated incident but rather part of a broader trend affecting the cryptocurrency market, which has seen significant impacts on altcoins as well. For instance, Ether has fallen below $2,800, while XRP is managing to stay above $2.00.
The recent selloff can be attributed to remarks made by Bank of Japan (BoJ) Governor Kazuo Ueda, who suggested that potential interest rate hikes could be forthcoming if economic conditions continue on their current trajectory. Such increases in borrowing costs can negatively influence carry trades, which are pivotal in the cryptocurrency market.
Moreover, the hacking incident involving the Yearn Finance protocol has further fueled negative sentiment, adding to the pressure on Bitcoin and the overall cryptocurrency ecosystem. As a result, approximately $140 billion was wiped from the crypto market cap within a 24-hour span, with around $500 million in leveraged positions liquidated.
Currently, the BTC/USD daily chart reflects a persistent bearish trend, with Bitcoin”s value falling by 5% during recent trading sessions. The technical indicators also reinforce this bearish outlook; the daily Relative Strength Index (RSI) sits at 32, trending towards oversold territory following a brief recovery last week. Should the RSI remain below 30, traders may anticipate additional downward movement in the near term.
Furthermore, the Moving Average Convergence Divergence (MACD) has shifted into a bearish momentum, signaling further sell pressure. If the downward trend continues, bearish traders will likely target the $80,600 support level. A failure to maintain this critical support could lead Bitcoin to revisit its April 7 low, which was $74,508. Conversely, should the bulls manage a recovery, Bitcoin could potentially rebound towards $90,000 in the coming hours or days.
As the market navigates these turbulent waters, investors are advised to stay alert to developments that may influence Bitcoin”s pricing and the broader cryptocurrency landscape.
