Bitcoin hits new local highs, but the move may be unsustainable
The crypto market as a whole continues to react to changes in sentiment in the stock market. This week, bitcoin repeated the rally of US stocks, updating a local maximum above $71.5 thousand. However, analysts are concerned about the further dynamics of the first cryptocurrency.
The main concerns of experts:
- Low market liquidity can lead to sharp downward price movements;
- The approach of the 50-day moving average may become a serious resistance for the bulls.
The situation in the crypto market is heavily dependent on the overall background in the economy and on the stock exchanges. Uncertainty around the prospects of the US Federal Reserve's monetary policy and the risk of a recession remain, which creates the prerequisites for a new wave of sell-offs.
Thus, the current bitcoin rally may prove to be short-lived. It is quite possible that in the near future we will see the activity of the bears, who will try to return the first cryptocurrency to lower levels. Investors should keep their finger on the pulse and be prepared for high volatility.