- Over the past week, there has been selling pressure on bitcoin.
- The cryptocurrency is currently trading close to a crucial support level.
- The overall picture is negative, and there are still dangers to the downside.
The latest downturn in Bitcoin’s current uptrend, which began in June, has brought us closer to a crucial support area. When the price reached $25,300, buyers flooded the market, putting an end to the selling frenzy and demonstrating that demand is still strong in the $25,000 range. Because of this, Bitcoin began to stabilize around the $26,000 mark. But when we look at the bigger picture, it’s clear that the downside risk still exists since there aren’t enough buyers above those prices. During the general bearish movement from April to June, the current levels had previously served as a support area. The BlackRock’s Bitcoin ETF application announcement intervened and functioned as a stimulus for the cryptocurrency’s march toward the $30,000 range during that time, as predictions of future losses for Bitcoin gained traction.
Looking ahead, it is not anticipated that the remaining days of August will offer news that will significantly affect Bitcoin. The FOMC minutes’ confirmation of hawkish viewpoints had a negative impact on the cryptocurrency, which caused a decline. Additionally, the US bankruptcy case of Chinese real estate behemoth Evergrande contributed to a decrease in risk appetite worldwide. Technically, we’ll be keeping a careful eye on the $26,200 area to see if these two events have been taken into account in price. Daily sales that close at prices higher than this one can encourage new buyers to enter the market. Additionally, holdings in futures worth about $1 billion were liquidated during the collapse. This provides the idea that a short-term bottom may be developing.
The $26,000 support zone has been crucial in 2023. If it malfunctions, the new support line can change to $24,000. The lack of a catalyst to ignite an upward rise might allow the decline to continue. It seems likely that Bitcoin’s price will eventually challenge the $24,000 level as long as it stays below $26,200. Prior to that, though, the area between $20,800 and $23,000 may come into focus if the next support line at $24,800 is broken. The aim is to gain a foothold over the $26,200 mark in order to support a potential upward momentum. Then, should Bitcoin be able to overcome the $27,300 mark in its subsequent move, it may be able to escape the downward trend and start the recovery process. Although the spot Bitcoin ETF has not yet been approved, a favorable decision might still have a big impact, especially given that its introduction is anticipated for September. These estimates suggest that the possible range over the following two weeks may be $24,800 to $27,300, with $26,200 serving as a critical reference point.
When Bitcoin tested $30,000 this month, the Stochastic RSI, which we regularly monitor, reached its top. This indicator, which has a bearish trend and is currently in the oversold area on the daily chart, may support the decline so long as it stays below 20. Additionally, short-term EMA values continue to show a reversal crossing and a negative view. Another interesting technical finding is that the price of Bitcoin intensified its downward trend once a daily candle formed below the 3-month EMA. This moving average has historically provided dynamic support starting in July. The downward crossover of the 8 and 21-day EMA values against the 3-month EMA further suggests the possibility of further fall in the future as the price of bitcoin has entered the negative region in the current scenario.
Please note that this article does not offer any instructions or suggestions regarding investment decisions. Therefore, it is essential that you carefully evaluate your financial situation and conduct thorough analysis, or seek advice from a qualified professional, before making any investment decisions.