Bitcoin has spent the last 48 hours below $6ok. It has seen huge volatility since August 8, when it registered one of the biggest surges. It peaked at $62,700 but retraced and ended the day at $61,699 with gains of almost 12%.
The hike sparked speculation of further increases. However, price action since then failed to meet the expectations. The last two days saw the asset retrace below its seven-day low. It started trading on August 14 at $60,600 but experienced corrections after a failed attempt at $62k.
BTC retraced to $58,456 but ended the day a little higher, resulting in a more than 3% decline. It sank lower during the previous intraday session, rebounding off $56k. Although it recovered, it failed to erase the small losses it incurred.
The downtrend began when news of the United States moving bitcoin worth almost $600 million to an exchange made the rounds. Many feared that the government was planning to sell off these assets, but they remained hopeful that the impact on price would not be significant.
While many believed that the US just sold a huge chunk of its BTC holdings, others blame the most recent downtrend on weak hands. The latest cryptocurrency failed to immediately react to the news until the bears joined the trend. From all indications, they are not exhausted.
Data from CryptoQuant Suggests Further Decline
New data from CryptoQuant suggests that traders are losing interest in the Apex coin. They reached this conclusion because funding rates dropped to their lowest level this year. Institutional investment has since been on the decline as it dropped by over 5% in the last seven days.
Aside from institutional interest, the Asian market is grappling with bearish sentiment. Derivatives are also seeing reduced activity as they see less fund inflow. Coupled with the low funding, the most recent small price hike is almost unsustainable.
Miners have resumed selling. They took a break from selling a few days ago but have since resumed. However, indicators point to a gradual unload, which may not adversely affect prices.
The Net Unrealized Profit and Loss metric shows that most traders’ profit margins have declined despite today’s over 2% increase. This reading could indicate an impending selloff.
Bitcoin May Crash Again
With on-chain data hinting at further decline, a small crash is almost inevitable. The trading volume also dropped by over 13% in the last 24 hours. The growing trend points to the asset seeing more price decline.
Currently trading below its pivot point, the apex is at risk of dropping as low as its first pivot support at $55k. If the bulls fail to defend the S1, such a decline may also set the tone for a retest of $54k.
Nonetheless, the relative strength index is hinting at an ongoing momentum buildup. The metric increased from 41 to 45 in the last 24 hours in reaction to the growing buying pressure. The current green candle is also a result of the buyers edging.
MACD is pointing at a short-term uptrend as it resumes printing positive signals. The 12-day EMA is on an uptrend, and if trading conditions remain the same, it may intercept the 26-day EMA in the next 24 hours. With the ongoing bullish convergence, the apex coin may break $60k.
Elendu Benedict | September 4, 2024
