Bitcoin price has been in a freefall for the past few days, dropping below the crucial level of $28,000. BTC, the largest cryptocurrency by market cap, has dipped more than 1% in the past week and nearly 8% in the past week. The coin’s total market cap has slipped to $535 billion over the last day, while its total volume decreased.
Bitcoin price has been under intense pressure for the past few days amid the overall sell-off in the global crypto market due to “congestion.” Bitcoin, the most valued digital asset, as well as Ethereum, the largest altcoin by market cap, have been struggling to gain momentum in the past few days. As such, the global crypto market has dipped further as most coins tend to move in tandem with the performance of the heavyweights.
Bitcoin price has been changing hands at $27,600, moving below the important support level established at $28,000. Binance, the largest cryptocurrency exchange firm, moved over $4 billion worth of BTC between its crypto wallets earlier this week. The high volume of transactions caused congestion on the Bitcoin blockchain, prompting Binance to halt BTC withdrawals on its platform twice in 24 hours.
The congestion also saw transaction fees surge, surpassing the block rewards for the first time since 2017. The surge in BTC’s transaction fees lit a fire under Binance to upgrade to the Bitcoin Lightning Network. Following the second halt, Binance announced it would work on enabling the Binance Lightning Network which would help in such situations in the future.
The recent moves by Binance have seen Bitcoin fall by more than 6% in the past three days, below the $28K level. The current bearish trajectory has left many traders to speculate whether more selloffs are looming.
Bitcoin Price Outlook
Bitcoin price has been in a freefall for four consecutive days, changing hands at $27,500. The coin has slipped below the 50-day moving average, as well as the 50-day simple moving average and exponential moving average. As highlighted on the daily chart, Bitcoin’s Relative Strength Index (RSI) has also ticked lower, below the neutral zone. The Moving Average Convergence Divergence (MACD) indicator also suggests a continued bearish trajectory.
Therefore, with the ongoing congestion in the Bitcoin blockchain, I expect the Bitcoin price to fall further in the ensuing session as bears eye the next support at $26,500. However, a flip above the 50-DMA at $28,550 will invalidate my bearish thesis.