Bitcoin Price Continues to Decline in August
In August, the price of Bitcoin experienced a whole lot of decline, with bears dominating the market. Over the course of 30 days, Bitcoin lost 11.5% of its price, dropping to $25,808. Since July, the largest digital currency has only seen two positive trend candles, indicating a strong bearish trend.
An important turning point took place when Bitcoin lost support at $30,000, which analysts and investors underestimated. This breakdown not only put an end to the previous positive trend outlook that drove the price of Bitcoin (BTC) to $32,000 in June, but likewise confirmed the presence of a critical growing wedge pattern.
Bitcoin Price Downtrend Continues
The ongoing downtrend in July, August, and September is a to continue of the breakout from the growing wedge pattern. The price of Bitcoin is expected to fall further by 36.63%, reaching $18,940. As of now, approximately 10% of the fall has been completed, with another 26% likely to follow.
On the weekly chart, the 200-week Exponential Moving Average (EMA) at $25,586 is a critical level of support that bulls must defend. Bitcoin is as of now below the 50-week EMA and the 100-week EMA, indicating that bears have the upper hand.
The Relative Strength Index (RSI) has been in a negative state since April and may need to reach oversold levels before the price of Bitcoin begins a whole lot of trend reversal. The negative divergence between the RSI and the price should have served as a warning that Bitcoin was not ready for a bull run, regardless of reaching $32,000.
Considerations for Traders
Short positions in Bitcoin are likely to remain profitable as bulls search for stronger support. Traders should consider booking profits along the way to avoid sudden bear traps caused by short-term price swings, which are not sustainable in the long run. Probable exit levels for shorts or entry points for short-term long positions include $24,000, $22,000, and $20,000.
Bitcoin (BTC) Short-Term Holders Face Losses
Short-term holders of Bitcoin (BTC) have been forced to close their positions and absorb losses. This has resulted in a 14% decrease in the supply of Bitcoin in profit, according to ARK Invest. Regardless of the negative sentiment, some analysts, like Ben Lilly, believe that this period may be the beginning of a bull run. Lilly points to Bitcoin (BTC) Dominance action in 2018 and 2019 as a probable indicator of a future reversal.
“We trended down for a few months before getting a substantial reversal,” Lilly said.
Although while the present downtrend in Bitcoin could be discouraging, it’s critical to remember that market conditions can change quickly. Keep a close eye on key support levels and indicators, and consider different trading strategies to navigate the volatility. Don’t let short-term losses deter you from the long-term probable of digital currencies like Bitcoin.
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