Bitcoin tumbled back under $30,000 to its lowest price in a week, as another short surge of upward momentum lost steam amid market caution.
Although the world’s largest cryptocurrency showed promising signs last week, rising to over $31,400 at one point, those gains were wiped out with a 7% drop to $29,209, a level not seen since May 30.
When the cryptocurrency was briefly above $31,000, some investors grew optimistic that it had further room to grow, but the crypto encountered a firm resistance level at around $31,500.
Analysts expect further oscillations within a defined range. With no galvanizing crypto news on the horizon, they expect sentiment to keep prices within a narrow trading band, with the distinct chance that it could even breach its support level and go lower.
Bitcoin has been showing a strong correlation with risk assets in recent times. The latest jump in treasury yields fueled concerns that rising borrowing costs could induce a recession, affecting Bitcoin’s prospects.
What does this mean for me?
Bitcoin and other cryptocurrencies, like Ethereum, have been very volatile in the last few weeks. This volatility is not new to this financial asset class. However, there is emerging evidence of cryptos falling in line with other risk assets that suffer from weak sentiment and profit from bullish optimism. This was not always the case with cryptos, which seemed to operate according to their own logic in the early days. For the crypto investor, this growing bank of information on cryptos’ cycles can only benefit you.
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