Bitcoin Price May See a Bearish Move Below $25K Here's Why

Pathik Bhattacharya
Pathik Bhattacharya
Published on May 17, 2023 11:34 AM

Bitcoin was set to give up $27,000 as support on May 17, with traders bracing for fresh lows.

Bitcoin Price May See a Bearish Move Below $25K Here's Why
Source: Unsplash

Bitcoin is trading below the $27K mark on Wednesday as selling pressure continues to woo investors. The recent fall is mostly due to two factors affecting the market. The one is obvious; US inflation rises and the second one is the memecoin frenzy. Over the year, Bitcoin has been affected by US macroeconomic conditions as it holds a very good share of the global financial market.

Bitcoiners are more optimistic that the US Federal Reserve would suspend interest rate hikes soon as US inflation rises. The numbers for April indicate hints of moderation, marking the tenth month of moderation. As inflation in the United States has been progressively decreasing for months, it has provided a glimmer of optimism for cryptocurrency investors, who may anticipate the currency to rebound once again.  

Furthermore, the deterioration of the US banking system has prompted investors to seek alternative investment options rather than placing all of their money in traditional financial products. 

The Memecoin chaos is another significant factor attributed to the flow of large volumes from Bitcoin to other memecoins like Pepe, Floki Inu, WOJAK etc. Bitcoin was progressing slowly hardly generating much profit. Meanwhile, memecoins like Pepe coin, WOJAK and others were emitting thousands of per cent of profits skyrocketing to unbelievable numbers. Bitcoin trading volume started falling from 21 March when other memecoin's started surging, partially affecting Bitcoin's market value.

Bitcoin Technical Analysis

Bitcoin reached the important barrier level of $30,000 for the first time since June 10, 2022, in April, before falling back to $28,000. 

This year, Bitcoin has increased by 80% above last year's values. The path to recovery, though, is lengthy, as Bitcoin is still down about 50% from its all-time high. which will surpass $69,000 in November 2021. 

At the press time, Bitcoin (BTC) price is trading at $26,859.63, with a 24-hour trading volume of $12,181,855,829. This indicates a -0.83% drop in the last 24 hours and a -2.70% drop in the previous 7 days. Bitcoin has a market valuation of $520,429,239,396 with a circulating supply of 19 million BTC.

Bitcoin is making a Rounding top pattern as 4 peaks have been tested by BTC price action at $29K, $31K, and $28K and now the pattern has been fully drawn by testing the $27K resistance. The local support at $27,279 has been breached and BTC fell below the aforementioned supports. 

Additionally, Bitcoin is trading side by the $26,929 support. The pattern indicates that the downfall shows the investors losing interest in the asset and could lead to a sell-off. If Bitcoin goes further beyond the current support, the $26,791 support is likely to be tested afterwards.

The RSI is dipping down significantly. Currently, the 14-day RSI stalls at the 39 mark and there's a possibility of receding further. 

bitcoin price chart

Source: TradingView

Furthermore, the number of active addresses has dropped to 764K, the lowest level since July 2021. The average transaction cost on the blockchain increased from $2.5 last year to $16.08 at the peak because of the buzz around BRC-20 and Ordinals tokens. The scenario benefits Bitcoin miners, who are earning more commission on transactions than from mining for the sixth time in history (6.25 BTC), according to Glassnode.


In conclusion, the Bitcoin market is facing negative sentiment due to falling US economic conditions and the memecoin frenzy over the market. Investors are losing grip on holding Bitcoin as new memecoin's are generating much profits in the short-term driving the volume from BTC to altcoins. Overall, Bitcoin's technical indicators are also bearish pointing towards a "SELL" market.

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