BTC is struggling to rise in the short term for the following reasons:
Technical Analysis Aspects
- Key Resistance Level Suppression: BTC has encountered important resistance levels during its upward trend, such as around $105,457.44, with multiple attempts failing to break through effectively. The bears are firmly defending this area, and the bulls need to gather stronger energy to break through.
- Technical Indicator Adjustment Needs: After the previous rise, some technical indicators have entered overbought territory or issued warning signals such as divergence, indicating a depletion of short-term upward momentum. The market needs to undergo technical adjustments to repair overheating indicators and digest accumulated pressure.
- Lack of Clear Breakthrough Signals: To break the stalemate of sideways movement, clear technical breakthrough signals are usually needed, such as effectively standing above key resistance levels with significantly increased trading volume, and indicators like MACD and RSI issuing clear bullish signals. However, these key breakthrough signals have not yet clearly emerged.
Market Sentiment and Capital Aspects
- Profit Taking and Bull-Bear Balance: The previous rapid rise in BTC accumulated a significant amount of profit-taking positions. When the price reaches high levels or faces uncertainty, some investors tend to lock in profits, leading to selling pressure. At the same time, bullish forces are relatively cautious in the current volatile market, and although bearish forces are waiting for opportunities, they have not formed an overwhelming advantage, resulting in a delicate balance between bulls and bears, causing sideways fluctuations.
- Market Sentiment Becoming Rational: After experiencing a previous surge, investors' understanding of cryptocurrencies is gradually returning to rationality. They are no longer blindly chasing short-term profits but are placing more emphasis on risk management and value judgment. The irrational upward momentum driven by FOMO sentiment has faded, the overall market sentiment has cooled, and in the absence of clear positive signals, investors are more inclined to wait and see.
- Macroeconomic Factors and Risk Appetite: The global macroeconomic environment is full of variables, such as persistently high inflation pressure, shadows of geopolitical conflicts, and expectations for monetary policy adjustments in major economies. Investors' risk aversion is rising, leading to more cautious allocations towards risk assets. As a high-risk asset, Bitcoin struggles to attract large-scale incremental capital inflows, limiting upward momentum.
- Regulatory Policy Uncertainty: The direction of cryptocurrency regulatory policies globally remains unclear, like the sword of Damocles hanging over the market. The uncertainty in regulatory policies keeps market participants generally cautious, and without clear favorable regulatory policies being introduced, it is difficult to form strong expectations that would drive prices upward.
- Institutional Capital Inflow Pace: The speed and attitude of institutional capital inflow significantly impact BTC prices. Recently, the pace of institutional capital inflow may have slowed, or is waiting for clearer market signals. If institutional investors turn cautious, the Bitcoin market will lose important funding support, making the rebound path more tortuous.
Other Potential Factors
- Miner Selling Pressure: Miners are important participants in the Bitcoin market. Their mining costs, profit expectations, and judgments about future market trends will affect their holding strategies and selling behaviors. If miners generally feel pressure and increase selling, it will impact the supply side of the market and create downward pressure on Bitcoin prices.
- Exchange Liquidity: The liquidity situation of cryptocurrency exchanges, trading depth, and stability of trading systems directly affect the microstructure of the market and price volatility. If exchanges experience liquidity tightness, insufficient trading depth, or systemic risks, it may exacerbate market fluctuations and suppress Bitcoin prices from stabilizing and rebounding.
