Bitcoin (BTC) investors should expect a further decline in the asset based on notable technical indicators displayed by the cryptocurrency.
According to crypto trading expert Alan Santana, in an August 29 TradingView post, investors can identify potential trend reversals in the Bitcoin market by leveraging the exponential moving averages (EMAs) and trading volume.
In October 2023, Bitcoin traded sideways and consolidated below several critical EMAs. However, a decisive move above these averages triggered a bullish trend, supported by the highest trading volume seen in many months. This breakout initiated a sustained upward price movement, confirming the market’s bullish sentiment.
The analyst noted that Bitcoin was in a similar yet opposite situation in August 2024. The bearish sentiment strengthened as Bitcoin started trading below all the key EMAs this time. This shift was accompanied by the highest bearish volume since November 2022, indicating that a significant price drop could be on the horizon.
Bitcoin key levels to watch
Santana noted that just as the high-volume move above the EMAs confirmed the bullish trend in 2023, the current high-volume move below the EMAs likely confirms a bearish trend. The relevant EMAs range from 8 to 144 periods, with the highest around $62,100 and the lowest around $60,800.
The analysis pointed to a possible slight bounce towards the $62,000 range, which could set a new lower high before Bitcoin begins its next leg. The next major low target is around $48,000, a level that could be reached as part of the expected price decline, after the formation of a lower high around $65,000.
“This month, August 2024, while Bitcoin moved and closed below all the EMAs, it also produced the highest bearish volume since November 2022. This could be a signal that could easily precede a major price drop,” the expert said.
It’s worth noting that Bitcoin continues to show bearish sentiment, with whales seemingly taking advantage. According to data from crypto analytics platform Santiment, shared by Ali Martinez, there has been a drop of 40,000 BTC in exchange inventory over the past 48 hours, equivalent to about $2.40 billion. This suggests that whales may be hoarding the asset in anticipation of a possible breakout.
Bitcoin price potential breakout
Regarding a possible price breakout, crypto analyst Michael van de Poppe noted that Bitcoin is moving between pivotal levels, marking an uncertain yet pivotal moment for the cryptocurrency market.
He pointed out that market analysts are closely watching the release of personal consumption expenditures (PCE) data, anticipating potential bullish movement. The PCE data, a key indicator of inflation, has historically influenced market sentiment across various asset classes, including cryptocurrencies. In particular, the data remained unchanged in July at 2.5% year-on-year, below the market expectation of 2.6%.
According to van de Poppe, Bitcoin is trading in a range with strong support around the $54,200 level, a zone that has held firm during recent market downturns.
However, the resistance to watch is at $61,000. This level is seen as a critical threshold; breaking above it could pave the way for Bitcoin to test higher levels and possibly set a new upward trajectory. Conversely, failure to break this resistance could cause Bitcoin to remain in its current range.
Bitcoin price analysis
At the time of reporting, Bitcoin was valued at $58,110, with the digital asset failing to reclaim the $60,000 resistance in the near term. The current price level indicates that Bitcoin is down more than 3% in the last 24 hours, while BTC is down almost 7% in the last seven days.
In conclusion, Bitcoin seems to be in limbo at the moment, with bulls and bears waiting for each other to make any significant move. Based on recent trading activity, the $60,000 level remains central to Bitcoin’s ability to validate any bullish trajectory.
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