Bitcoin had one of the biggest dips during the previous intraday session. It started the previous day, trading at $58k but retraced as trading conditions worsened. The apex coin dropped to a low of $49,577 as it dipped below $50k for the first time in over five months.
The decline spurred a lot of reaction from the market. Traders remained in shock, as the supposed bull market was taking a turn for the worse, and there seemed to be no relief in sight. Although the apex coin recovered, it closed at $54k, which signified an over 7% loss.
BTC dump during the previous intraday session marked the fourth consecutive day of decline, indicating a growing need for a trend reversal. The over 17% loss the apex coin accumulated in the last four days saw it quickly slip below $60k.
What Caused the Decline?
The US economy could be heading for recession in the coming months. The recently released job index, which displayed a lower-than-expected figure, heightened the fear. Several traditional stocks have since been on a downtrend as investors pulled funds out.
One such is Warren Buffet, who sold 50% of his Apple stock and other related assets. Following this dump, he had over $277 billion in cash. News of such a selloff spread panic across the market, resulting in other investors doing the same.
The Japan stock exchange also made the round during the previous intraday session. Analyst tell that the country just had its biggest crash in years and may have a rippling effect on the world’s economy.
The crypto market is massively reacting to such declines. The correlation between BTC and other traditional stocks remains high and next price actions will affect both sectors.
Several on-chain data is pointing to the coin seeing massive decline in investors’ interest. Indicators like the Coinbase premium and Korea premium are bearish at the time of writing.
The metric shows that the funding rates from the US and Korea have significantly dropped. Crypto investors are becoming increasingly uncertain about next price actions.
The exchange Netflow also point to the platforms seeing more BTC from off-exchange wallets. The metric is negative which may indicate an impending selling pressure.
There are other indicators that points to an ongoing buyback. The relative strength index was negative which indicate an impending trend reversal as the asset is oversold.
The exchange reserves has since been on the decline since the buyback started. The apex coin is up by over 5% in the last 24 hours.
Bitcoin Eyes $58k
Bitcoin is currently trading at $55,900. It started the day at $54k but is experiencing notable buying pressure. The current price may be the needed trend reversal the cryptocurrency needs.
Indicators are also positive at the time of writing. The moving average convergence divergence has been on the downtrend for the past seven days. However, the metric has halted its downward movement and may see a trend reversal as the recovery continues.
The relative strength index dropped to a low of 26, the lowest in the almost a three months. It has returned above 30, indicating that BTC is seeing an healthy amount of bullish action.
If the trend continues, the coin will look to decisively flip $55k. Breaking the first pivot support will result in the bulls having a stronger price mark to defend.
They will also look to create more gap from this critical support. It could result in the asset shooting above $56k which may open up the $58k resistance.
The highlight mark appears to have served as a positive barrier for some time and may continue this trend in the coming days.
Elendu Benedict | September 4, 2024
