Bitcoin is trending lower as of this writing, cooling off after an encouraging surge on August 23. While the uptrend continues, and the coin is not far from $63,000, there is no reason to rule out the possibility that sellers will continue to pressure. A continuation of the early August low could lead to another wave of liquidations, which could cause panic.
Bitcoin is unstable, the first two levels to watch
Technically, Bitcoin is in a bullish breakout formation of the bull flag that was created after the expansion on August 8.
Additionally, from a volume analysis perspective, bulls have a chance as prices are still inside the bull bar of August 23. As long as the trading volume remains light with the price falling, buyers may jump in again and push prices higher above $66,000.
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However, assuming that Bitcoin bears have the upper hand, one analyst at X says, He believes It will be important for traders to closely monitor how prices react at the following four reaction lines. From Bitcoin’s cost basis comparison via CryptoQuant, the first support level, which has now become resistance after a sustained decline, is $63,450.
At this price point, the analyst said this is the average price at which new whales are buying Bitcoin. It remains to be seen whether prices will recover and reach above $64,000 in the coming days.
However, the fact that whales are in the picture is a positive thing. Unlike retail traders, whales tend to hold onto assets and not give them away whenever prices fluctuate.
If the bears do not give up and the price drops below $60,000, traders should watch how the price reacts at $55,540. According to the trader’s analysis, Binance users have placed their support at $55,540. Therefore, a price drop below this level could easily trigger a panic sell as traders on the exchange rush to safety.
Miners and Long-Term Investors: The Last Walls
At a deeper level, the key support level will be $44,400. This area is where most miners are considered profitable. As long as the price is trading above this line, most miners, mostly whales, can hold onto their coins, anticipating price gains. In early August, Bitcoin fell sharply but failed to break through this area, highlighting its importance in terms of Bitcoin price action.
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Below, $25,000 is another accumulation level that traders will watch in the event of a general collapse. $25,000 is the average price at which long-term holders have bought bitcoin. Long-term holders are those who have bought bitcoin for more than 155 days.
This group Mostly This market has whales and network believers. Technically, a drop below $50k and the August 2024 lows could be the basis for another drop to $40k and worse.
While bears may be in control of the market, there are also supporting factors that continue to motivate bulls. BlackRock, one of the world’s largest asset managers, recently added bitcoin to its Global Strategic Bond Fund as a hedge against traditional assets. Its Bitcoin exchange-traded fund, IBIT, already exists. It holds billions of BTC on behalf of its institutional clients.
Featured image of DALLE, chart from TradingView
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