Why Do Bitcoin Traders Predict BTC Will Go To US$27,500?

After the emergence of positive sentiment on Bitcoin assets (BTC) in the first six months of 2023, Bitcoin price movements have now experienced a period of stagnation ranging between US$ 29,000 and US$ 31,500.

From this stagnation, a number of analysts and traders predict there will be a price decline or correction. Apart from that, there are also several factors that give rise to the belief that in the near future, the price of Bitcoin may be traded sideways or downward.

Launching from cointelegraph.com, this thesis is supported by three key factors with two of them relying on technical analysis and the third focusing on fundamentals.

The first factor involves strong resistance at the US$32,000 level. Charles Edwards, founder of Capriole Investments pointed out to this significant resistance that Bitcoin has failed to break these levels, even in the midst of an onslaught of positive news for the crypto industry.

The inability to maintain momentum above US$ 31,000 can be considered as a bearish signal.

Second, he also questions whether Bitcoin support at US$29,500 will hold. This is because the main crypto has not had any significant deviating movements below the US $ 30,000 mark for almost a month.

"The lack of resistance below $29,500 suggests a potential downside break from the current consolidation," said Capriole.

He also said there were possible reasons for the further decline. Notably, the US$27,500 level holds as key support based on the previous price action.

Third, the declining volume suggests that the recent price slump may not be as bearish as it seems. However, if there is another bigger drop in volume during the pullback, then the bears will take control of the market.

“The fourth factor revolves around the weakening fundamentals of the Bitcoin network. It is important to consider fundamental metrics, such as on-chain flows, investor capital allocation, overall market sentiment, macro-environmental impact as well as network security," he said.

Capriole's Bitcoin Macro Index, which he uses to measure the aggregate of 40 fundamental variables shows decent long-term value to investors on a multi-year basis. However, it is important to note that despite this short-term bearish development, the long-term bull thesis for Bitcoin remains intact.

“The positive news continues to flow, and the next halving event is less than a year away. A significant highlight is the 50 percent increase in hash rate over the last six months,” concluded Capriole.