Although the price of bitcoin has just crossed $ 34,000 and hopes are back for more, some are not optimistic that the trend will continue.
to the Report The Coin Telegraph, the strengthening of the dollar index, the beginning of a new wave of the Corona virus and the decline in trading volume may weaken the current uptrend in the bitcoin market.
The bitcoin market situation has been such in recent months that it has confused many investors. For some time now, investors have been wondering whether we will see a leap soon or whether the market is preparing the ground for another downtrend.
Historical price data and statistics from previous corrections show that given the strength of the dollar index, the possibility of reducing protectionist policies and technical factors of Bitcoin, we may see the current market situation for a longer period.
According to Delphi Digital, one of the most important factors putting more pressure on high-risk assets such as stocks and bitcoins is the strengthening US dollar and its efforts to reverse its trend. It is worth mentioning that in late May (June) we saw this index fall below 90.
Rising dollar index halts one-year growth in US Treasury Department 10-year bond yields. This rate is in fact a reflection of the economic expansion that we saw in early 2021, and now with the rise of the dollar index, we must wait for it to decline. In the meantime, we should not ignore the new wave of Corona virus outbreak. According to many experts, this wave could threaten the recovery of the global economy.
The short-term outlook for the bitcoin market remains sluggish, as a correction period that could last nearly a year follows a previous death cross that appeared on the bitcoin chart in late June.
Digital Delphi analysis shows that the 12-month moving average has acted as a support, and a re-fall below this level may intensify the downtrend and further fall.
From the past until now, the 12-month moving average has served as a key support for Bitcoin; Therefore, the reaction of Bitcoin to this level can be decisive for the uptrend. However, traders need to be cautious, as historically low trading volumes for bitcoin have always led to more market volatility, as fewer buy orders can lead to rapid price volatility.
Coin Kelly, a Delphi digital analyst, believes that the short-term downtrend in the market will be a little brighter if we see support levels near $ 30,000 break. He goes on to say:
I do not necessarily think that we will see falls like December 2017 and early 2018 and late 2018 (fall); But in my opinion, given the market structure, we can expect short-term fluctuations and possible falls.