Market Analyst Predicts Bitcoin’s Drop To $25k Before Finding Support

Key Points:

• Bitcoin’s value has retreated below $30,000, causing a significant shift in the cryptocurrency market.
• The year-to-date climb in top 100 digital tokens has cooled to just 46%.

According to Bloomberg, Bitcoin’s retreat below $30,000 has caused a significant shift in the cryptocurrency market. The year-to-date climb in top 100 digital tokens is now just 46%.

The cryptocurrency market is experiencing a significant shift as Bitcoin retreats below $30,000. The once-impressive lead that digital assets held over stocks in 2023 is now cracking. The year-to-date climb in the top 100 digital tokens has cooled to just 46%, not much higher than the 41% jump in the Nasdaq 100 Index of tech stocks. This growth in the equity measure is attributed to hype over artificial intelligence products.

Digital assets received a boost from a court setback for a regulatory crackdown in the US and optimism that the country might allow spot Bitcoin exchange-traded funds. However, with those drivers now gone, investors are assessing how the expected Federal Reserve interest-rate hike this week may affect markets.

According to Caroline Mauron, co-founder of digital-asset derivatives liquidity provider OrBit Markets, “the rally has lost momentum following the initial excitement sparked by the ETF news, and there are no other visible catalysts on the horizon.” She adds that downside risk “should be limited as the Fed is near the end of the current rate-hiking cycle, which should support risk assets including crypto.”

Some chart patterns signal caution. Bitcoin’s 20-week Bollinger bandwidth has shrunk to the narrowest in seven years, suggesting intense moves in the largest digital asset, potentially on the way down if key thresholds give way. The Bollinger study is a way of analyzing volatility.

According to Tony Sycamore, a market analyst at IG Australia Pty, “Bitcoin’s drop should extend toward $26,000/$25,000 before finding support.” In the meantime, the token fell 3.3% on Monday and was steady at about $29,150 as of this writing.

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