Bitcoin has been struggling to maintain a positive outlook lately, with the latest dip pushing it below the crucial $28,600 support level. This was a significant setback for the cryptocurrency as it had previously acted as resistance, and traders were hoping for a reversal.
Currently, Bitcoin is sandwiched between two critical price levels, and it’s highly likely that it will trade sideways, potentially forming a head-and-shoulders pattern. The left shoulder was formed earlier this month, followed by the head, and now the market seems to be starting to create the right shoulder.
This pattern’s target is around $25,000, which may seem far off, but it could happen sooner than expected. Additionally, the recent bullishness of the US dollar is not good news for Bitcoin. There is an inverse correlation between the dollar strength and Bitcoin’s price, meaning that when the dollar is up, Bitcoin tends to fall, and vice versa.
Currently, the dollar is experiencing a W-correction, meaning it’s undergoing a deep correction, hitting a local bottom, then rebounding before testing the local bottom again and finally heading upwards. This is good news for the dollar but bad news for Bitcoin.
As much as people were hoping for Bitcoin to reach $1 million in June, there are currently not enough bullish signals to push it above $40,000. Losing a critical support level and the bullishness of the dollar are all bearish signals, and the correlation is no exception.
In conclusion, it seems that Bitcoin could be headed for a major correction soon. Investors should keep a close eye on the market and prepare for any eventualities.
Disclaimer: This blog post is for informational purposes only and should not be construed as financial advice. While we strive to provide accurate information, we cannot guarantee that there are no errors or omissions. Investing in cryptocurrencies carries a high level of risk, and investors should perform their own due diligence before making any investment decisions