As a seasoned crypto investor with battle scars from the 2017 bull run and the subsequent bear market, I’ve learned to read between the lines when it comes to Bitcoin price movements. While the technical analysis suggests a potential drop towards $56K, my experienced eyes can see the underlying strength in the current market conditions.
The price of Bitcoin appears ready for a potential decrease, but the underlying market indicators suggest a contrasting scenario.
BTC is down by nearly 10% in the past week, currently struggling to remain above $58,000.
Technical Analysis
By TradingRage
The Daily Chart
Over the course of each day, the value of this asset has been holding steady near the $60K point. This comes after it was turned away at the $64K resistance and encountered the significant 200-day moving average, both situated around the same price range. It seems likely that the market will soon challenge the $56K support level.
The Relative Strength Index (RSI) has dipped under the 50 mark, hinting at a slight downtrend in momentum. Consequently, should the $56K resistance fail to keep the price stable, a potential fall towards the $52K support area may ensue.
The 4-Hour Chart
Examining the 4-hour chart, it’s clear that the market hasn’t managed to regain the $68K barrier, which it previously fell from, as the $64K resistance area has pushed prices lower instead. Given the present situation, a return to the $56K mark appears very likely.
Yet, the cryptocurrency might be able to rebound from the level, as the market structure is showing signs of weakness in the bearish trend.
On-Chain Analysis
By TradingRage
Bitcoin Exchange Reserve
Over the last few months, I’ve found myself pondering about the nature of Bitcoin’s price movement. Is it an accumulation phase where savvy investors are stockpiling coins in anticipation of a bull run, or could it be a distribution period where early adopters are cashing out? The uncertainty is palpable, but only time will tell which scenario unfolds.
This diagram illustrates the Bitcoin Exchange Reservoir, a measure that quantifies the number of Bitcoins stored in exchange accounts. Since these coins can be swiftly liquidated, they are considered as a representation of the available supply.
Based on the graph, it appears that the Exchange Reserve figure has been decreasing significantly since the start of the consolidation period, suggesting a build-up or accumulation phase.
As Bitcoin reserves continue to decline significantly, the chances for a supply shrink, which can lead to a new price rally, are increasing significantly. Yet, the futures market conditions also plays a massive role in price action, and should be considered carefully before drawing any conclusions.
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2024-09-01 09:42