In somewhat indecent fashion, Bitcoin’s (BTC) journey to a new all-time high of $108,268 was followed by an estimated 17% decline that pushed the asset’s price to a local low of $92,281.
This significant drop in prices is due to the recent policy announcement by the US Federal Reserve, which adopted another interest rate cut of 25 basis points at its last meeting of the Federal Open Market Committee. While interest rate cuts are bullish signals for the cryptocurrency market, the Federal Reserve has also revealed intentions to reduce its four cuts initially expected in 2025 from four to just two, leading to a widespread offloading of risky assets by investors.
As expected, the significant decline in the price of Bitcoin raises questions about the future of the asset, especially regarding the continued rise of the cryptocurrency.
The analyst says there is nothing to be afraid of yet
In a post Using four critical simple moving averages, SMA21, SMA50, SMA200, and SMA365, Kesmeci gained important insight into Bitcoin’s price. Current market situation.
To start, the analyst notes that the flagship cryptocurrency has fallen below its SMA21 at $99,565. However, this development has little impact on Bitcoin’s immediate future as the SMA21 could easily be affected by any price breakout.
On the other hand, the SMA50, which is currently at $91,803, has a significant impact on Bitcoin price momentum in the short term. If the market bulls can maintain a daily or weekly close above the price level, it is a good omen for a price rise.
Notably, BTC has been on an upward trend since early October. During this period, the number one cryptocurrency rose from $60,200 to over $108,000. Commenting on the feasibility of this uptrend, Kesmeci stated that Bitcoin’s distance from the SMA200 and SMA365 indicates that the bullish structure of the asset remains intact.
This is because the bottom of any long-term trend in the Bitcoin market is determined when the price breaks below either of the simple moving averages (SMA). In conclusion, Kesmeci told BTC investors that there is nothing to fear despite the price decline over the past week. The analyst states that corrections of up to 20% and 30% are considered normal based on historical data for any previous bullish wave.
Bitcoin price overview
At the time of writing, Bitcoin is trading at $97,354 after a slight rebound from its previous low over the past day. Meanwhile, the daily trading volume of the asset increased by 7.35% and is valued at $103.92 billion.
Featured image from Nairametrics, chart from Tradingview.com
Source: https://bitcoinist.com/bitcoin-bull-cycle-remains-far-from-over-here-why/