Bitcoin Price Recovery Underway Following Sharp Drop
Bitcoin is in the process of recovering from a sharp 20% drop this week that saw the leading cryptocurrency fall to $49,000, a low not seen since February. Despite the rebound, caution is warranted as a potential bearish pattern has emerged on the 10-day chart.
Analysts Identify Bearish Indicators
Technical analyst Ali Martinez has pointed out that Bitcoin is forming a rising wedge pattern, often a signal of further downward movement. While BTC’s price might reach $57,000 at the wedge’s upper limit, Martinez cautions investors to watch for a possible breakdown that could push the cryptocurrency back towards $51,000.
- Martinez highlights the critical support level at $54,000 based on market value to realized value ratios, indicating a key level that could prevent a significant drop below $40,000.
- If $54,000 holds, the analyst sees resistance at $67,000 as the next major target for Bitcoin.
Another analyst, Rekt Capital, has also observed signs of a recovery in Bitcoin’s price, with the digital asset attempting to fill a new CME gap. While a smaller gap exists between $53,700 and $54,600, any short-term downturn could see this gap filled.
Positive Signs in the Bitcoin Market
Despite the bearish signals, Ki Young Ju, the CEO of CryptoQuant, points to several metrics suggesting that the overall bullish trend in Bitcoin remains intact:
- The recovery in Bitcoin’s hashrate indicates near-end to miner capitulation, with mining costs acting as a potential price floor.
- Significant inflows of Bitcoin into custody wallets signal active accumulation by institutional investors.
- Decreased selling pressure from long-term holders implies a shift towards strategic accumulation by institutional players with a long-term perspective.
The reduced presence of retail investors, a surge in permanent holder addresses, and a decline in selling pressure from old whales all paint a positive picture for Bitcoin’s future market dynamics.
Bitcoin Struggles Towards $57,000 Level
Currently, Bitcoin faces resistance at the $56,670 mark as it tries to recover from recent losses. The larger time frame shows a 13% decrease in price over the past week, highlighting the challenges ahead for the leading cryptocurrency.
By
By
By