Bitcoin is finally deflating a little bit as prices move slightly lower from around $9700 down to down about $100 below that.
Omkar Godbole at Coindesk is one of those who are analyzing all of the recent Bitcoin news to look at why the long-term rally may be at an end, for now.
First, there are the technicals, which are seeming to indicate bullish sentiment on Bitcoin.
“Technical studies have been biased bullish from the start of the week,” Godbole writes. “For instance, last week’s candle penetrated an 11-month falling trendline, confirming a bullish breakout. Further, the 50- and 200-day averages produced a “golden crossover” earlier Thursday, signaling long-term bullish conditions (as technical theory suggests, anyway).”
Godbole also notes that ongoing American money printing still has traders looking for safe harbor options that beat inflation over time.
That leads to the most common-sense explanation for the price declines, which Godbole describes as “buyer exhaustion.”
“The cryptocurrency has rallied by over 150% in the past two months,” he writes, suggesting a rationale. “The rally was likely fueled by the bullish narrative surrounding the reward halving, which took place on May 11, and due to the unprecedented amounts of liquidity injected by major central banks into the traditional markets.”
Others are describing BTC’s price action as somewhat of a balancing act.
“The breakout of the $10,000 target is remarkably close,” writes Yuval Gov at Cryptopotato, also noting the golden cross in technical analysis. “However, it also feels close as well to a massive price dump. Remember, from a technical point of view, the fact that Bitcoin so far fails to break the $10K benchmark level, along with the declining amount of volume means that every tryout becomes weaker.”