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Bitcoin Down- Bullish exhaustion or bearish trend?

Bitcoin (BTC) is currently at $8000. It was staring right at $10,000 before it stumbled back to mid $7500, and recovering to keep things tense for bulls, casual for bears.

Here what the market is saying as to the reasons of this respite in bullish sentiment.

How low can Bitcoin go?

Although Bitcoin’s recent drop into the $7,000 region appeared to have put its bullish momentum in jeopardy, analysts are now noting that it may drop as low as $5,400 before the bulls surrender their control fully, according to NewsBTC .

“Over a one-week trading period, BTC has been oscillating between the lower-$7,000 region and the upper-$8,000 region, which is quickly becoming a fresh trading range that may ultimately lead to a persistent pattern of consolidation,” the site said.

“Importantly, it now appears that Bitcoin could drop significantly further in the near future before it becomes bearish from a long-term perspective.”

Bitcoin not safe

Bitcoin is again feeling the pull of gravity amid a rally in gold – a classic safe haven asset, says Coindesk.

The premiere cryptocurrency topped out at highs near $9,100 on May 30 to hit a 2.5-week low of $7,432 on June 4.

The pullback was expected as technical charts were reporting bullish exhaustion having rallied by nearly $4,000 in May.

“The correction is accompanied by a sharp rally in gold prices. The yellow metal picked up a bid at $1,275 per Oz on May 30 and climbed to $1,344 per Oz on Wednesday – the highest level since Feb. 20,” Coindesk said.

Bitcoin and Gold comparison

https://ecvo8ubt6cq.exactdn.com/wp-content/uploads/2021/07/BTCUSD-and-Gold-rally.png?strip=all&lossy=1&w=624&ssl=1

“While gold – a zero-yielding asset – is cheering increased prospects of a drop in US borrowing costs, bitcoin is taking a hit, possibly due to chart-driven factors.” 

How much did Bitcoin lose so far?

Bitcoin adoption is at an all time from major players in the market like Facebook, Apple, Samsung and others, according to NewsBTC.

But the selloff is on.

BTC is down over 11% week-to-date.

“Strong support is at $7,500 with caps at $8,500 and $9,000. Since BTC is consolidating against the USD, aggressive traders can buy the dips aware that any fall below $7,500 cancels this bullish outlook,” says NewsBTC.

Bitcoin fell on Thursday and looks set to snap its 10-week winning streak, with fears growing that the popular crypto's path of least resistance could be to the downside, according to Investing.com. 

“Getting back above $8,000 is likely to be a struggle,” it said.

“BTC fell 2.3% to $7,687 Thursday, down from a high for the day of $7,861.40.

“Many have suggested that its meteoric four-month rise, in which it saw its value more than double, has prompted some profit taking, especially from crypto whales.”

Bitcoin's total market cap has fallen to $136 billion from its peak of about $154 billion.

The total crypto market cap, often use to gauge demand, fell to about $222 billion after trading above $250 billion at the highs earlier this week.