Bitcoin traders regain optimism as BTC price aims to reclaim $57K
2024.08.06 14:46
Bitcoin (BTC) has had a bad start in August, falling over 14% month-to-date. This was fueled by a number of negative macroeconomic factors, including an interest rate hike in Japan, worsening US employment data, and geopolitical tensions in the Middle East.
Data from Cointelegraph Markets Pro and TradingView shows that Bitcoin dropped to a seven-month low at $49,577 on Bitstamp after losing the key support provided by the 200-day EMA and the $50,000 level.
BTC/USD daily chart. Source: TradingView
Bitcoin’s drop below $50,000 on Aug. 5 led to massive liquidations and more than $500 billion being wiped out of the crypto market.
At the time of publication, Bitcoin had recovered to reclaim $56,000 after finding support around the $54,000 zone, up 2.5% over the last 24 hours. This recovery has aroused optimism among Bitcoin analysts, who now believe in BTC’s potential to recover to higher levels.
“#Bitcoin took out the previous lows and retested the January highs,” Bitcoin analyst Jelle wrote in an Aug. 6 post on the X social media platform, adding that the price needed to get back above $57,000 to ensure that “all is well.”
Fellow analyst Mags shared the following chart on Aug. 6, showing that the relative strength index (RSI) is oversold on the daily timeframe.
Mags explained that this oscillating trend-following indicator had “entered the oversold zone for the 5th time in this cycle,” suggesting that the reducing downward momentum backed by sellers’ exhaustion and buying the dips could initiate a recovery in BTC.
“Each time the RSI dips below 30, it has been a good opportunity to accumulate Bitcoin.”
BTC/USD chart. Source: Mags
Moustache shared similar sentiments, explaining that the RSI had sent a bullish signal on the daily chart, presenting the “buying opportunity. ”
“These things usually happen in the bottom range.”
Analysts at Kaiko corroborated this in their Aug. 5 post on X, which revealed that the recent sell-off was characterized by dip buying on US-based crypto exchanges such as Coinbase, Gemini and Kraken, evidenced by cumulative volume delta (CVD).
A rising positive CVD – the total difference between the volume of trades executed at the ask price and trades executed at the bid price over a specific period – indicates that buying volume exceeds selling volume.
“While offshore exchanges such as Binance and OKX saw strong selling since Friday, BTC’s cumulative volume delta (CVD) on most US platforms remained positive, suggesting that some traders bought the dip.”
Bitcoin CVD. Source: Kaiko
The latest BTC flash crash below $50,000 marked a 23.7% drawdown from its opening on April 20, the day of the Bitcoin halving.
Veteran trader and analyst Peter Brandt said that the latest post-halving correction is similar to the 2015-2017 cycle adding that if things play out in a similar manner, we could see a “new bull cycle high” weeks from now.
BTC price post-halving performance. Source: Peter Brandt
Titan of Crypto believes Bitcoin is in its “final capitulation” after experiencing a flash crash to the bottom of the right-angled descending broadening wedge. The chart pattern projected Bitcoin’s upside above $90,000.
“A relief rally from here wouldn’t be surprising.”
BTC/USD daily chart. Source: Titan of Crypto
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
