As a seasoned crypto investor with a few bear market cycles under my belt, I’ve learned to keep a level head during times of market volatility and selling pressure. The recent news of the German government selling Bitcoin and Mt. Gox creditors receiving disbursements has added to the selling pressure, causing the price to hover around $55,000.
With Germany’s ongoing sale of Bitcoin and Mt. Gox creditor payouts underway, Bitcoin faces downward price pressure. However, despite this, the cryptocurrency’s value remains above $55,000, and technical indicators suggest that it is currently oversold. Could we have reached the local bottom?
Constant drip, drip of selling
Based on Lookonchain’s report, the German government moved 1,000 Bitcoin worth approximately $37,000 from its digital wallet today. It then divided this amount and sent 500 Bitcoin (around $18,500) each to Coinbase and Bitstamp. With these transactions, the German holdings of Bitcoin now total approximately 38,826 coins.
The persistent trickle of sales in the market will eventually take its toll, yet it’s essential to consider this factor, along with anticipated sales from Mt. Gox creditors, when pricing assets.
As an analyst, I’ve observed that Bitcoin seems significantly oversold at the moment. Consequently, we can anticipate a fierce struggle between sellers and buyers in the upcoming months. Small-term retail holders have been compelled to exit the market during the recent bout of panic selling. However, it remains uncertain if institutional investors will take advantage of these reduced prices by making sizeable purchases.
$BTC below 200-day MA
In the given daily chart, Bitcoin ($BTC) is currently hovering beneath its 200-day moving average (represented by the red line). Such a position is not common during a bull market for Bitcoin. The last instance of this occurred back in September 2023.
Bull flag is redrawn
Using a different perspective, the wick reaching down to $53,500 on the chart formed a new base for Bitcoin’s bull flag. This level aligned perfectly with the third contact of the lower trend line of the bull flag, suggesting a potential return to the bull flag’s peak and another possible breakout. Although it is still in its infancy, this could be an indication of a reversal in the trend.
From a researcher’s perspective, stepping back to observe the market on a weekly basis allows for a clearer view of the bull flag formation and its significant touchpoints. Notably, at the moment of writing, Bitcoin (BTC) has experienced a notable surge. The price increase exceeds 3% on a daily basis, potentially positioning BTC for an attempt to surpass the 200-day moving average. If this effort is successful, it may signify more than just a relief bounce in the market trends.
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2024-07-08 12:12