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<a href="https://bitcoinworld.co.in/bitcoin-crashes-below-8-month-support-line-more-pain-incoming/" title="Bitcoin Crashes Below 8-Month Support Line, More Pain Incoming?" rel="noopener noreferrer nofollow"></a> 
A significant shift in the Bitcoin landscape has brought the cryptocurrency below a crucial support band and the 20-week moving average for the first time since early January. This marked development, evident in the weekly chart, has raised concerns about the coin’s prospects. Currently trading at approximately $26,000, Bitcoin has experienced an 18% decline from its peak in July 2023, leaving coin holders grappling with escalating price pressures. 
Technical Analysis Raises Red Flags 
An analyst on X, previously known as Twitter, has illuminated this pivotal price formation, prompting further scrutiny of Bitcoin’s trajectory in the coming days and weeks. The recent breach of key support levels and the 20-week moving average underscores a shift in market dynamics. The dominance of sellers in the price action is evident as they actively work to erase gains achieved between June and July 2023. This trajectory compounds the pressure on holders and threatens to trigger liquidations of long positions on derivatives exchanges. The resultant impact on sentiment could have a ripple effect, reducing liquidity across the broader crypto ecosystem. 
Declining Trading Volumes and Fragile Market Sentiment 
A deeper examination of the weekly chart reveals a concerning trend: a pronounced decrease in trading volumes. This decline in trading activity follows the culmination of a bearish price formation in the previous year. Particularly noteworthy is the timing of this drop in trading volume, coinciding with the collapse of several banks in the United States, including the prominent Silicon Valley Bank (SVB), in March. This series of bank failures led to the depegging of the USDC and subsequently influenced the performance of top cryptocurrencies, including Bitcoin and Ethereum. 
The lack of significant bullish momentum to ignite demand and counteract the losses sustained in 2022 raises questions about the market’s resilience. Despite a rally that pushed Bitcoin’s price towards the $32,000 mark in July 2023, the hesitation exhibited by bullish forces indicates a delicate market sentiment. The ongoing drawdown’s pace presents looming risks, suggesting the potential for further price erosion in the latter half of 2023, amplifying the challenges for long-term coin holders. 
Macro Factors and Fundamental Influences 
Analysts attribute the ongoing sell-off to a constellation of fundamental factors that have overshadowed Bitcoin’s outlook. The looming anticipation of interest rate hikes by the United States Federal Reserve (Fed) in the upcoming months introduces uncertainty. The prospect of increased borrowing costs arising from these rate hikes adds to market jitters. The Fed’s projected actions stem from the persistent inflation levels that have remained significantly above the benchmark 2% threshold. This higher funding rate environment can potentially disrupt the crypto market’s risk-reward equilibrium, reshaping investor strategies. 
Beyond the domestic macroeconomic forces, the recent Chapter 11 bankruptcy filing by China’s Evergrande Group has indirectly reverberated throughout the cryptocurrency space. The unfolding developments within China’s precarious real estate sector have generated shifts in sentiment that are likely to echo across the crypto landscape. These developments cast a shadow on Bitcoin’s future trajectory, introducing additional uncertainties and challenges in a landscape characterized by rapidly evolving dynamics. 
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The post <a rel="noopener noreferrer nofollow" href="https://bitcoinworld.co.in/bitcoin-crashes-below-8-month-support-line-more-pain-incoming/">Bitcoin Crashes Below 8-Month Support Line, More Pain Incoming?</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://bitcoinworld.co.in">BitcoinWorld</a>.

Bitcoin Crashes Below 8-Month Support Line, More Pain Incoming?

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