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Bitcoin (BTC) Could Break Below $25,000 – Here is Why

Bitcoin (BTC) Could Break Below $25,000 – Here is Why

Bitcoin remains in a downward trend despite the expected US inflation data release. The current market uncertainty is primarily linked to the approaching US debt ceiling, which is nearing its limit.

This situation has a negative impact on risk assets, potentially causing a decline in BTC’s value to around $25,000.

The influence of the increasing US debt ceiling is evident not only in the crypto market but also in the stock market. Bitcoin’s close correlation with the stock market explains its decline in such market conditions.

According to Treasury Secretary Janet Yellen, the US is expected to reach its debt ceiling by June 1. This gives investors approximately two weeks, and understandably, they are cautious because breaching the debt ceiling could have severe economic consequences.

It is likely that the US will once again raise the debt ceiling, as it has done since 1960. However, many questions regarding the economy remain unanswered. Consequently, investors are likely to adopt a more conservative approach during this period.

Risk assets, including stocks and Bitcoin, will continue declining until June 1. The subsequent decision on the debt ceiling will determine investors’ approach to the market. Nevertheless, the outcome, whether positive or negative, remains uncertain.

If Bitcoin’s price declines next month, it will likely reach $25,000. Currently, the bulls are maintaining support at $26,000, albeit precariously. Even a slight increase in selling pressure from the bears could break this support, causing BTC to drop to $25,000.


READ MORE: Michael Saylor Envisions Major Banks Embracing Bitcoin Custody


The bearish trend of Bitcoin trading below its 50-day moving average further supports this scenario. However, this analysis applies only in the short term. In the long run, the digital asset remains predominantly bullish, trading above its 200-day moving average.

Should the bulls manage to hold the $26,000 level into the new month, the short-term outlook for BTC becomes bullish. This would likely result in a recovery and another price rally. The cryptocurrency would easily regain the $30,000 level in such a scenario.

At the time of writing, BTC is trading at $26,455, marking a 1% increase in the last 24 hours and a 1.5% drop on the weekly chart.

Author
Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.

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