Relative Strength Index (RSI) is neutral at present, neither indicating significant overbought positions nor oversold levels. This surely gives Bitcoin some leeway to gain positive momentum or perhaps pull back a bit. Other momentum indicators, for instance, the MACD, also show neutral signals, which indicates that there is an expanse of time to wait before Bitcoin takes any action.
Traders and investors are analyzing major support and resistance levels. $83,000 is strong support, while the resistance level is $86,000. Resolute price movement beyond the $86,000 level may suggest the commencement of bullish action, while movement below the $83,000 mark may hold meaning for a possible bearish turn. In the next few days, it is expected that Bitcoin’s price action will continue with volatility as traders will be scouting for clues to take their next step.
Bitcoin price movements have recently been influenced by various factors, the most important being some institutional players entering the fray. BlackRock: the giant among asset management firms, made news with its acquisition of Bitcoin worth $30.8 million. This acquisition meant institutional interest was coming into play, with the market responding favorably and contributing to the week-long rise in Bitcoin price. The positive outlook created by the BlackRock acquisition has added some fuel to Bitcoin’s continuous rise over the previous week.
Despite the institutional interest, there is generally a cautious sentiment among the broader market participants. Their primary focus is on regulation, especially in the United States and Europe, where work is being done to provide clearer guidance on regulations for the cryptocurrency markets. Negative news on regulation could spur heavy selling, whereas any supportive regulations would act as tailwinds, giving further thrust to Bitcoin.
Apart from regulations, various macroeconomic factors are weighing on the current investor sentiment, such as interest rates, inflation, and the global economic outlook. Bitcoin is often considered an inflation hedge and would benefit should inflationary forces elsewhere continue to build. A tightening of monetary policy stance from central banks, on the other hand, may cause demand for all risk assets, including bitcoin, to dwindle.
