Bitcoin (BTC) has dropped significantly in the last 24 hours after failing to break beyond the $32,000 level after much anticipation for a rally.
BTC is down over 5% at $29,535 and has been stuck in a tight range for over a month. There also appear to be a few factors that favor price increases in the short run.
Instead, technical indicators show that Bitcoin could fall below $24,000 in the next few weeks. The cryptocurrency is expected to see increased selling pressure ahead of significant U.S. inflation data due this week,
Other factors, such as greater regulatory scrutiny of crypto, could result in more BTC losses.
BTC predicted to follow its 2018 move
BTC is trading in a bear flag structure, with the pattern set to play out in additional losses, according to prominent crypto analyst @SmartContracter.
The analyst expects the token to drop below $24,000, which could be a good time to buy. They also pointed out that BTC’s recent price activity is playing out very similar to that seen in 2018 when the token had traded in a narrow range for several months before plummeting by over 50% to as low as $3,000.
Given that 2018 was the last time the Federal Reserve raised rates before 2022, BTC is likely to behave similarly. As such, with more rate hikes on the way, BTC may see further capitulation.
The release of inflation data will be a make-or-break for the markets
The U.S May inflation data which is due this Friday is expected to play a big role in defining the market sentiment in the coming weeks. Traders will be looking for any further price reductions in May after inflation slowed slightly in April.
According to MarketWatch data, the broad estimate for May is 8.2% year-over-year growth, down from 8.3% in April.
Any reading that is lower than the consensus will almost certainly result in a BTC surge. But the opposite may result in even more severe market declines.
Anticipation of a major crypto bill, which is likely to be released this week could also define BTC price movement.
