Bitcoin is down. Earlier today, the coin fell to $49,000, down 30% from its July highs. Although the coin briefly pulled back, paring some losses, the downtrend is still intact, at least judging by the candlestick formation on the daily chart. The sharp sell-off in Bitcoin is impacting the altcoin and cryptocurrency markets. At the time of writing, the total market cap of cryptocurrencies, according to CoinMarketCapThe market value of the US central bank fell by 15.46% to about $1.82 trillion.
Bitcoin at Risky Level: Bears Could Push Prices to $40K
Although the uptrend is still in the top-down preview phase, one analyst believes that the coming days will see more blood if sellers continue to press.
Moving on to X and citing on-chain developments, the analyst said, male Since the coin recently dropped 12% from the price achieved by on-chain traders, Bitcoin finds itself at a crucial level. In the past, prices have risen, returning to the basic uptrend when Bitcoin prices retested this line.
The price realized by on-chain traders is a metric used to indicate the average price at which the current group of BTC holders purchased their coins. Currently, the price of BTC is significantly lower than the realized price, which means that BTC holders are in a tight spot and may be considering selling to manage risk.
If Bitcoin continues its losses today, the likelihood of holders exiting to stablecoins or fiat currencies will be higher, accelerating the sell-off. According to the on-chain analyst, Bitcoin price may drop towards the $40,000 level if sellers continue to press hard.
Is it time for institutions to buy at a discount?
From the daily chart, the bears reversed all the gains recorded from July 8 to July 21, pushing the price below the July 2024 lows. By pasting the Fibonacci retracement tool on the swing high and low from October 2023 to March 2024, it is clear that Bitcoin has retested the 50% Fibonacci level.
Meanwhile, the August 5 bar was wide and featured high volume, which means that the sell-off is supported. Since the coin is within a bearish breakout formation, the chances of Bitcoin sliding towards the 78.6% Fibonacci level or a low of $35,000 remain very likely.
However, if Bitcoin finds support this week, bulls may gain the courage to help the recovery. This would be a welcome development now that Bitcoin has fallen below the $1,000 level when prices crashed today. Average base cost From BlackRock’s Bitcoin ETF, which is priced at around $58,700.
As long as prices remain at or below this area, institutional investors may double down, buying more at a lower price through BlackRock.
Featured image from Canva, chart from TradingView
Comments are closed, but trackbacks and pingbacks are open.