Bitcoin (BTC) Price Falls Below $50,000 for the First Time Since February

The decrease is part of a broader crypto sell-off that has caused panic in the market. Further, this development was also a result of macroeconomic factors affecting the crypto ecosystem.

Bitcoin (BTC) dropped below the crucial $50,000 support level for the first time since February. The coin hit a low of $49,032 in the early hours of August 5.

The decline comes amid a broader crypto sell-off that has sparked fears of a market downturn. The development was also influenced by macroeconomic factors impacting the crypto ecosystem.

Bank of Japan Rate Hike Contributes to Bitcoin’s Woes

According to Bloomberg, the Bank of Japan’s surprising decision to increase interest rates is putting pressure on Bitcoin and the crypto market. The development has led to the strengthening of the Japanese yen (JPY) against the U.S. dollar (USD).

As a result, traders who borrowed will now have to pay higher interest rates on the JPY they lent. Other assets, including Nasdaq futures and S&P 500 futures, are also being impacted, falling by 5% and 3%, respectively.

Bitcoin’s market cap, which stood at $1.37 trillion on July 29, fell below $1 trillion before a recent rebound pushed it back above the threshold.

Following the development, several comments surfaced on X, with some suggesting that the market may be entering a bear phase.

“This market structure is starting to look like the beginning of a bear market,” noted one X user.

Whale Panda, a pseudonymous Bitcoin holder, highlighted the sharp decline in a post on X.

“BTC went from $70k to $52k in a week (-26%). ETH went from $3400 to $2100 (-39%). This has been one of the most brutal performances in a long time.”

BTC Price Analysis: Down, but Not Out

At press time, BTC had recovered to above $50,000, trading at $51,313. The Relative Strength Index (RSI) being in the oversold territory may have contributed to the bounce.

The RSI gauges momentum and identifies overbought and oversold levels. Readings above 80.00 indicate that a coin is overbought and may experience a downward reversal. On the other hand, a reading below 30.00, like in Bitcoin’s case, suggests an oversold point, which could lead to a bullish reversal.

If the rebound continues, BTC could retest the resistance at $54,423. However, if the bulls fail to sustain the rally, the coin’s price may fall back to the support at $49,032.

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