As a seasoned researcher with years of market analysis under my belt, I’ve learned to expect the unexpected when it comes to Bitcoin. Just when you think it’s safe to go long, the market takes a nosedive and leaves us scratching our heads. The recent drop below $60,000 has been no exception.
1. Bitcoin has been consistently falling below expectations. Over a two-day period, the BTC price dropped by over $6,000, having failed to hold onto its $65,000 peak. The substantial volatility led to approximately $300 million in liquidations across the cryptocurrency market, with most of these losses coming from long positions.
Just when you thought it was safe to go long …
Suddenly, when it seemed the Bitcoin market was stable and heading upwards based on broader economic indicators, the price unexpectedly plummeted by 9.6% over just two days. This sudden drop might have been exacerbated by the outflow of approximately 2000 Bitcoins from Spot Bitcoin ETFs on Tuesday, which halted a streak of eight consecutive days of inflows.
Does a bounce come here?
On Tuesday, the short-term Bitcoin chart indicates a sudden downturn that broke through an uptrend line, followed by a rapid decline resembling a falling stone, reaching the significant horizontal level of $58,000. The question now is whether this marks the point for an upward correction or if the price will continue its descent towards the 0.618 Fibonacci level at $55,000.
Crucial weekly close could be bullish
Stepping back to view events over the course of a week, we can see that the significant support at $58,000 remains intact. This level played a crucial role as both support and resistance during the 2021-2022 bull market, suggesting a potential rebound may occur from this point onward.
In simpler terms, the short-term Stochastic RSIs are all hitting their lowest points right now and could lead to an increase in the price of Bitcoin shortly. Meanwhile, the weekly Stochastic RSI, as depicted on the chart, suggests an upward trend, but the Relative Strength Index (RSI), at the bottom of the chart, is showing some worry because the line appears to be rejected by the downtrend.
In simple terms, the market’s closing price at the end of each week on Sunday could offer significant insight about whether these indicators will point towards a bullish (optimistic) or bearish (pessimistic) trend. If the market manages to rebound from the $58,000 level, this prediction might lean more towards being bullish.
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2024-08-28 12:09