journalist
Posted: September 8th, 2023
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and solely reflects the opinion of the author.
- Bitcoin erased all of its recent gains, showing that the bears remained dominant.
- A drop in BTC below $25,000 could lead to more massive losses in the crypto market.
Bitcoin [BTC] is showing a bearish market structure on the 1-day chart. The higher timeframe chart here was the weekly chart that showed BTC bulls desperately holding onto the $25,000 support zone. A drop below $24.8k would reverse the HTF structure and the king could fall back towards $20k.
Read Bitcoins [BTC] Price prediction 2023-24
Grayscale’s win over the SEC prompted a surge in whale interest. At the same time, miners are under cost pressures, but mine reserve outflows have moderated over the past week. Nevertheless, it does not rule out a forced sale of the miners to cover costs.
Bitcoin has been trading in a zone that the bulls are desperate to defend
Source: BTC/USDT on TradingView
The cyan box at $25,000 represented a bullish order block on the daily chart. This block ranged from $24.8,000 to $26,000. Since mid-June, BTC has traded in a range between $24.8k and $31.8k.
The $25,000 area served as resistance in February and March this year. Therefore, their retest as a support is a significant event and a fight the bulls need to emerge victorious. A one-day close below $24.8k would likely be a signal that the bulls are exhausted and Bitcoin is preparing for a drop to $20k, the next area of interest on the daily chart.
OBV saw no notable move due to volume falling since April, but the shorter timeframes showed that OBV has trended down since mid-August. The RSI was consistent with the price structure and showed that a bearish trend was in progress since July 24th when a bearish market structure break occurred on the D1 chart.
This lower volatility meant that a sharp move in either direction was possible before a trend reversal in search of liquidity – and August 29th was a good example. Gains on the Grayscale news fell completely, a sign that the bulls have little say in the market.
The rising average age of the coins gave some hope to the beleaguered bulls
Source: Santiment
The MVRV ratio has been negative for the past few weeks, indicating an undervalued bitcoin. However, it was unclear if the selling pressure is coming to an end. The ‘Age of Eat’ metric saw a few spikes over the past two weeks, suggesting that sellers had the upper hand.
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Conversely, the average coin age has trended higher since late July, although Bitcoin saw a sharp decline in August. This was a signal that long-term buyers preferred HODLing.
While it was encouraging, it doesn’t mean an uptrend is imminent. Instead, it’s a sign that investors with a long time horizon shouldn’t focus too much on price action.
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