Bitcoin (BTC) Faces Potential Retest of Long-Term Support Levels Amid Price Decline
Summary:
Bitcoin (BTC) faces a potential retest of long-term support levels as its price falls below $26,000. Concerns arise as on-chain data suggests weak support below $25,400, with potential for a swift correction to $23,340. Furthermore, proprietary trading tools indicate that support at $24,750 is crucial for a potential rebound. August 31 saw significant long liquidations, amounting to $41 million in BTC. Investors should exercise caution and perform their own research before making any investment decisions.
Bitcoin (BTC) could potentially retest a crucial support level, as indicated by data, following the decline in BTC price during the August monthly close. BTC/USD 1-hour chart demonstrates BTC/USD is currently below $26,000, reversing the gains observed last week. Market participants had optimism leading up to the close, with Bitcoin maintaining a key long-term trendline and preserving the $27,000 mark. However, the decision by the U.S. Securities and Exchange Commission (SEC) to postpone several Bitcoin spot price exchange-traded fund (ETF) applications forced a reassessment, resulting in a $1,000 drop in just two hourly candles. Observers are now worried that the current levels might not provide sufficient support for the market. Analysts suggest that if BTC falls below the $25,400 threshold, it could potentially correct down to $23,340. A UTXO Realized Price Distribution (URPD) chart from Glassnode indicates that a drop to $23,000 would not be unexpected. Material Indicators' on-chain monitoring resource also presents a bleak outlook for BTC/USD on daily, weekly, and monthly timeframes. According to their proprietary trading tool, Trend Precognition, bulls would need to maintain support at $24,750 to have a chance at a rebound. A close below $25,350 would invalidate the weekly signal, while holding above the low level at $24,750 would provide a solid foundation for a potential rally and retest of resistance. CoinGlass data reveals that August 31 saw the largest volume of BTC long liquidations since the 10% Bitcoin drop earlier in the month, amounting to $41 million, and $108 million across cryptocurrencies in total. This information is provided for informational purposes only and should not be considered as investment advice. Readers are advised to conduct their own research before making any investment or trading decisions.
Published At
9/1/2023 11:55:58 AM
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