Bitcoin Price Drops Below $29K Amid a Surge in Profit-Taking

Bitcoin price has been in consolidation mode for the past few weeks amid the continuation of the profit-taking trajectory that has been gathering pace in recent weeks. The digital asset is down by more than 2% in the past week and 5% in the past month. Bitcoin’s total market cap has also crashed over the last day, while the total volume of the asset traded over the same period jumped higher.

Fundamentals

Bitcoin, the largest cryptocurrency by market capitalization, has been under intense pressure for the past few weeks amid increased volatility in the cryptocurrency market. The crypto market has been on a downward trajectory for the past few weeks, characterized by significant outflows from digital currencies. According to Coinmarketcap, the global crypto market cap has plunged over the past few days to $1.15 trillion, while the total crypto market volume edged higher.

The recent trend in the crypto market has been against the backdrop of regulatory concerns in the industry. Coinbase, the largest cryptocurrency exchange in the United States by trading volume, has been battling a lawsuit against the US Securities and Exchange Commission for the past two months. Earlier in June, the SEC sued Coinbase, alleging the violation of federal security laws by operating as an unregistered exchange. Coinbase asked a judge to dismiss the SEC lawsuit against it, alleging the Wall Street regulator stepped out of its jurisdiction in suing the cryptocurrency exchange.

The Crypto Fear and Greed Index, which is used to measure the key emotions driving the cryptocurrency market, has slipped to a neutral level of 50. A move below this level will indicate that the market is in extreme fear, prompting investors to go on a selling spree.

The US dollar rose against major currencies on Monday ahead of the key inflation data slated for Thursday. The US dollar index, which measures the performance of the greenback against other currencies, was a little unchanged at 102.128 following its drop to a one-week low on Friday. Analysts expect core inflation of 4.7% on an annual basis for July, down from 4.8% in June.

Bitcoin Price Analysis

The daily chart shows that the Bitcoin price has been range-bound for the past few days, trading between the tight range of $29,588.85 and $29,000. The digital currency has failed to start a fresh rally above the crucial level of $30,000 despite the few attempts to move above this level.

Bitcoin remains below and above the 50-day and 200-day exponential moving averages, respectively. Its Relative Strength Index (RSI) has moved below the signal line and the neutral level, indicating an increase in selling pressure. The Moving Average Convergence Divergence (MACD) indicator, as well as the Momentum indicator, is in red.

Therefore, the Bitcoin price is likely to pull back further in the coming days amid market volatility and global economic uncertainty. As such, the next support levels to watch will be $28,345 and $27,000. However, a flip above the $30,000 threshold will invalidate my bearish thesis.

BTC Price Chart