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Thursday, October 6, 2022

Momentum Wanes, Bitcoin’s Downward Slope Continues

The bearish market is not leaving bitcoin alone. As of the time of writing, the famous cryptocurrency is approaching $20.5k. The market is concerned about even more declination of prices.

Achieving amounts of support or even the price that an asset does not drop below for a while, at about $20,500, Bitcoin (BTC) fell 6% on Tuesday. The downturn caused BTC’s price to fall by over 36% from its $32,000 200-day moving average.

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The decline in Bitcoin’s value coincides with a drop in its relative strength index, which has fallen to 41. The RSI indicator gauges how quickly and dramatically prices fluctuate. Readings of 70 and over are frequently regarded as signaling that even an asset (read Bitcoin) is overbought and are frequently used as a measure of momentum (especially when assets are moving). Levels of 30 or lower frequently signify that an asset has been oversold.

Bitcoin’s Bearish Nature In The Market Continues:

The Nasdaq index fell 1.9 percent, while the S&P 500 fell 0.7 percent in traditional equities markets. BTC has correlation values of 0.73 and 0.78 with S&P 500 and Nasdaq, respectively. Correlation coefficients measure the link between two variables and vary from 0 to 1, with higher values suggesting a stronger association.

Tuesday’s trade saw an 11% decline in the price of ether (ETH). It has correlation coefficients of 0.70 and 0.71 with the S&P 500 or Nasdaq, respectively. On Tuesday, altcoins also experienced negative trading, with MATIC from Polygon and LINK from Chainlink falling by 11% and 9%, respectively.

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Following a 5.7 percent drop on Monday as investors switched back to less risky investments, bitcoin’s price plunged 6 percent on Tuesday in trading.

Investors are afraid of the bearish nature of this famous cryptocurrency, and thus they show zero activity in the market.

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