The falling price of Bitcoin, which currently hovers around $40,000, has left many wondering if the bull market that started in early March is really over. Huobi Research’s analysis revealed many factors that may contribute to the current price and explained the changes that may occur in the future.

“The market is at a critical crossroads and this will determine the future price direction of Bitcoin (BTC),” said Huobi Research Principal Investigator William Lee.

From a macro perspective, we can say that one of the reasons behind Bitcoin’s price surge in March is the war between Russia and Ukraine and the currency substitution effect of the war. During this period, many people converted the Russian ruble, which had fallen sharply in value due to US and EU sanctions, into Bitcoin.

However, the situation is not as simple as it seems. The US and EU tightening sanctions against Russia in the crypto space since April, moves in Russia affecting individuals and businesses alike, and the global financial market entered a new era. The US consumer price index (CPI) gradually recovered and the change in monetary policy became inevitable.

From a technical analysis perspective, it can be seen that BTC has experienced two spikes since beginning its third bull run in the second half of 2020 and is currently positioned to turn into a third spike in line with the Triple Peak pattern.

However, this wave, often referred to as the B wave, was mainly caused by the war between Russia and Ukraine. This wave is often referred to as the final “escape wave”; Therefore, if the price continues to improve and form this third peak, the market is likely to see a sharp decline after the price changes from wave B to wave C.

On the other hand, despite the recent price drop (the blue line in Figure 1), the total price of BTC is still rising, creating an effective breakout for the market to the bottom line. (The table is in the attached bulletin.)

Figure 1: Three Triads of BTC and RSI Indicator

“The current RSI index is below 50, indicating a weak market, but that figure has not yet fallen below 30, meaning the market is not yet in an oversold state,” Lee said. “First of all, the cryptocurrency market is currently at a critical juncture. If the price continues in the channel, wave B will continue; Otherwise, the market will fall even harder.”

Source: (BHA) – Beyaz News Agency