Bitcoin Price Slides Below $27,000

Bitcoin price trades below a key support level as FUD grips crypto market participants. The correction follows a short rally initiated by U.S. inflation data that came in at 4.9% year-on-year, slightly lower than the expected 5% rise. 

The latest downturn confirms the continuation of a downtrend that has characterized the big crypto’s price action after BTC turned away from its 10-month high of around $31,050 reached on April 14. 

Crypto intelligence data provider Santiment says that the downturn in Bitcoin price comes at a time when sentiment among traders is turning bearish across social media platforms. 

Bitcoin Bulls Retreat As Social Sentiment Turns Bearish

As Bitcoin dips to $26,616 today, investor sentiment on all social media platforms turns negative. Sentiment, an on-chain data and social metrics analysis platform, says that “FUD signs are all over social media” as traders remain skeptical about BTC’s ability to return to the “coveted $30k level.”

📺😱 The #FUD signs are all over social media as traders are showing skepticism that #Bitcoin can regain the coveted $30k level once again. Our latest video market update covers the latest whale activity, and other important metrics you should be watching. https://t.co/fEYBT0mgX3 pic.twitter.com/j4Pfk70yWg

— Santiment (@santimentfeed) May 11, 2023

More data from the market intelligence firm shows that discussions on social media about the top 100 crypto  assets according to market capitalization are falling compared with the previous month. More specifically, discussions surrounding Bitcoin and large market capitalization altcoins declined by 18%. 

However, on-chain analyst and marketing director at Santiment Brian Quinlivan said that the current correction in Bitcoin price could be an opportunity for sidelined traders to “buy the dip.” 

Meanwhile, BTC is down 10% over the past 30 days, ETH fell 8% and a similar drawdown is observed in other top 10 non-stablecoin cryptos on CoinMarketCap. 

Note that this marks one of the largest 30-day declines since June last year in the wake of interest-rate hikes by the US Federal Reserve and changing macroeconomic conditions across the globe.

Bitcoin Price Stares Into An Abyss As Losses To $23,000 Loom

BTC price dropped below $27,000 on Thursday, a support level that had not been breached since mid-March. At the same time, the price of the largest cryptocurrency by market capitalization has continuously been suppressed by a stubborn descending trendline for the past 30 days. This has led to the appearance of a descending triangle on the daily chart as shown below. 

Descending triangles are significantly bearish indicators and feature exact bearish breakout targets equal to the thickest part of the triangle.

Bulls unsuccessfully attempted to breach the resistance from the downtrend line first on April 18 and again early this month. Both attempts ended up as mere frustrations as the bulls were not strong enough to break the barrier. 

Consequently, Bitcoin price continued to recoil inside the descending triangle with the resistance line governing the price lower. 

A break below the horizontal support line (the triangle’s x-axis) confirmed a bearish breakout for the pioneer cryptocurrency. This opens the path for BTC’s 13.32% downward spiral to $23,420.

BTC/USD Daily Chart

The same chart also showed there is a significant supplier congestion zone stretching from $27,000 to $31,000, suppressing Bitcoin price from pushing for an immediate rebound. 

Note that this is where the 50-day simple moving average (SMA), the triangle’s resistance line, and the $30,000 psychological level were found, suggesting that there were stiff barriers in BTC’s recovery path.

Besides, the Relative Strength Index (RSI) showed that the bears’ grip on the bellwether cryptocurrency was firm. This trend-following indicator was facing down and the price strength at 34 suggested that there was still more room for the downside.

On the upside, a daily candlestick close above the triangle’s support line trendline at $27,000 would mean buyers are aggressively defending this level. 

Such a move would bolster the coin towards the 50-day SMA near $28,500 and the triangle’s descending trendline at $29,250. Overcoming this level could see the BTC price rise towards the $31,050 range high.

Promising Alternatives To BTC

Note that Bitcoin’s recovery remains uncertain. The technical outlook points to deeper losses. Even if BTC returns above $27,000, it may coil within the governing chart pattern for some time without any directional bias.

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