Bitcoin traders risk-off as BTC price falls to $62K — Is a generational bottom approaching?
2024.08.02 17:03
Bitcoin (BTC) dropped by $2,300 one hour after the Wall Street opening on Aug. 2, reaching $62,368 on Coinbase. Bitcoin price has seen little change, rising 1% over the last 24 hours to trade at $63,252.
BTC/USD hourly chart. Source: TradingView
This sell-off has seen the price lose key support levels: the 50-day exponential moving average (EMA) at $64,300 and the 100-day EMA at $63,670.
“We got the #Bitcoin sweep I was waiting for and a nice reclaim of the range,” declared Bitcoin analyst AlphaBTC in an Aug. 2 post on X.
The analyst was referring to Bitcoin’s price action since July 30, when it turned away from highs of $66,996 to set a swing low just below $63,000 on Aug. 2.
AlphaBTC said that the price needed to hold the range low at $63,300 for it to increase the chance of retesting the range high at $67,000.
“Losing 63k now would be really bad!”
BTC/USD chart. Source: AlphaBTC
Fellow analyst Crypto Rover shared similar sentiments, saying that market participants would be in a bad situation “if #Bitcoin loses the $63k support.”
In an earlier X post, AlphaBTC presented two scenarios. The first is a bullish case where Bitcoin would confirm a triple bottom structure “around the 38.2 Fib level” at $63,450. This would see the pioneer cryptocurrency embark on a V-shaped recovery toward $66,800.
The second is a bearish case involving a breakdown of the support at $63,000, swiftly moving the price down to $61,000.
“Lose the level and fail to reclaim it quickly, and we could see low 61ks once again.”
BTC/USD chart. Source: AlphaBTC
With the current price action, AlphaBTC set the short-term bearish target for Bitcoin at $61,000.
Other analysts believe that Bitcoin’s price could see deeper corrections, setting downward targets between $58,000 and $55,000.
“Bitcoin’s current condition is technically bearish and supposed to decline to $58,000 or below,” independent trader Emperor Keo Xplus wrote in an Aug. 2 post on X.
Pseudonymous analyst Crypto Patel set the target lower, saying that $63,000 was an important level for the bulls.
“If #Bitcoin drops below it, the price could fall to under $55,000.”
The 200-day EMA provides the last line of defense for Bitcoin’s price
Data from Cointelegraph Markets Pro and TradingView shows Bitcoin’s price action has formed a series of higher lows on the daily chart to stay above the ascending trendline. Bitcoin bulls are required to hold the price above this level to avoid further losses.
The appearance of a long lower wick on the Aug. 1 candlestick on the daily chart implied the importance of the $65,000 level for buyers.
BTC/USD daily chart. Source: TradingView
However, if bulls lose the said support, they may retreat toward the 200-day EMA, which appears to be the last line of defense for BTC at $59,558.
Related: Bitcoin traders warn of tough Q3 as Nikkei echoes ‘Black Monday’ 1987
Popular analyst Caleb Frazen agreed with this outlook, saying that the 200-day EMA was a significant barrier for Bitcoin on its way down.
“If you think that #Bitcoin is going to stay in a bull market environment, then this is the level at which price is likely to rebound and make new highs.”
Data from IntoTheBlock, whose In/Out of the Money Around Price (IOMAP) model, also reinforces this level’s importance for Bitcoin. It sits just below the $60,755–$62,640 price range, where approximately 499,470 BTC were previously bought by about 1.54 million addresses.
Bitcoin IOMAP chart. Source: IntoTheBlock
This suggests that high demand-side liquidity from this cohort of investors could push BTC’s price past the resistance provided by the 100- and 50-day EMAs at $63,663 and $64,268, respectively, ending the sell-off to initiate a price recovery.
If this happens, according to popular analyst Moustache, BTC’s price below $63,000 could be the last time we see it.
Moustache explained that the BTC price was nurturing an inverse head-and-shoulders pattern on the 15-minute, which suggests a trend reversal to the upside.
Source: Moustache
The inverse head-and-shoulders pattern forms a reversal setup and includes an “inverted” head and shoulders, with the left and right shoulders upside down below the neckline.
If the pattern continues, Bitcoin’s price could embark on a massive upward breakout toward its next key price level of $65,000 before potentially retesting to the range high of $65,300.
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.
