Bitcoin's Drop: Hitting Lowest Levels Since March

By Samir El Khoury, ACSI, ACICMP?

The price of the leading cryptocurrency, Bitcoin, has fallen since the beginning of this week, reaching its lowest level since March 17th of this year. As of yesterday, it recorded a price of $25,350, down from its trading range of $25,800 to $28,452 about a month ago.

Bitcoin is considered a high-risk asset, as it has no fundamental analysis, and it is generally traded for the purpose of speculation.

Several factors have hampered the growth of Bitcoin's price. Among the most significant are:

1. The continuing regulatory restrictions by the US Securities and Exchange Commission (SEC) on cryptocurrency exchanges and platforms, as the authority on Monday filed a lawsuit against Binance, the largest cryptocurrency exchange in the world, demanding that all its assets in the United States be frozen. The authority also began suing Coinbase on Tuesday, seeking a ruling requiring the cryptocurrency exchange to comply with US laws.
2. Most central banks, especially the US Federal Reserve, continue to raise interest rates to tame inflation, which may negatively affect cryptocurrencies, specifically Bitcoin, denominated in US dollars. When the US dollar index rises, the attractiveness of Bitcoin to investors decreases and thus their appetite for buying decreases.

But despite these difficulties, many investors consider bitcoin as "digital gold", a safe haven that investors turn to in days of banking turmoil and crises. We have seen examples of this after the collapse of several US banks at the beginning of this year, where the price of bitcoin reached $31,035 on April 14th, marking its highest level this year.

From a technical side, and based on Fibonacci indicators, the price of Bitcoin may decline against the US dollar and test the support levels of 25,347 and 24,012. However, if it crosses the 27,000, it is likely to target the resistance levels of 28,333.

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.

Zenfinex Global Limited is a company registered in Seychelles with registration number: 8428731-1, and is regulated by the Financial Services Authority of Seychelles with License number: SD092. Its registered office is F20, 1st Floor, Eden Plaza, Eden Island, Seychelles.

*All trading involves risks