Bitcoin struggles near $79K as U.S. stocks take a downturn, driven by reduced government spending and the Bybit hack’s aftermath. Analysts emphasize monitoring RSI for potential price reversals amidst an overall market loss of $1 trillion in value.
Bitcoin is finding itself in a precarious position as it inches closer to a four-month low around $79,170 amidst a broader market downturn. As Wall Street opened on March 10, the cryptocurrency saw a decline of around 4%, echoing a general flight to safety that impacted riskier assets significantly. Meanwhile, major stock indices, like the S&P 500 and Nasdaq Composite, experienced substantial drops of 2% and 3.5%, respectively, fueling concerns in the cryptocurrency landscape.
The Kobeissi Letter highlighted the effects of reduced government spending, courtesy of the Department of Government Efficiency (DOGE), in its recent commentary. They caution that, “While everyone is focused on the trade war, do not discount the impact of reduced government spending expectations.” This decline in financial support, they assert, may be contributing to the broader crypto market’s malaise, which has seen a staggering $1 trillion wiped from its market cap over the past two months.
Mixed sentiments linger in the market regarding Bitcoin’s future movement. Popular analyst Rekt Capital suggests monitoring rising RSI values against diminishing prices to spot potential reversal signals. He noted, “Going forward, it’ll be worth watching for Bitcoin to form Lower Lows on the price action and Higher Lows on the RSI for a Bullish Divergence to develop.” Currently, the daily RSI is noted at 33.2, which prompts speculation on upcoming price movements.
In yet another layer of concern, QCP Capital attributes the cryptocurrency market’s downturn partly to last month’s hack of Bybit, a prominent exchange. They stated that preemptive sell-offs by holders fearing further depreciation could maintain pressure on prices. “Today’s price selloff may also be exacerbated by holders preemptively front-running further hacker-driven supply,” they noted, indicating heightened caution among traders.
Looking forward, QCP anticipates a new narrative may be necessary for crypto’s revival. With the current correlation between Bitcoin and equities forecasted to rise, volatility is expected to increase as key U.S. macroeconomic data is set to be released this week, including CPI and PPI reports.
Bitcoin’s recent performance signals a challenging landscape as it edges closer to significant lows. Influences such as reduced government spending and lingering effects from the Bybit hack compound the uncertainty. Analysts suggest monitoring the RSI for signs of reversal while observing correlations with stock market movements, especially with pivotal macroeconomic data set to be released soon. A clear path forward for Bitcoin remains shrouded in ambiguity as the market seeks a new narrative.
Original Source: cointelegraph.com
