Crypto News– BTC Short-Term Holders’, August proved to be a disappointing month for BTC’s price performance, with bears firmly establishing their dominance in the market. This extended a stubborn downtrend that had been in place since early July. Over the course of 30 days, BTC witnessed an 11.5% decline, ultimately settling at $25,808. Notably, the largest cryptocurrency managed to form just two bullish candles since the beginning of July.
BTC Short-Term Holders’ Capitulation Persists: Could a 26% Price Decline Be Next?
The loss of support at the $30,000 level marked a pivotal bearish turning point, one that was initially underestimated by both analysts and investors alike. This development not only brought an end to the previously optimistic technical outlook that had driven Bitcoin’s price to $32,000 in June but also confirmed the presence of a critical rising wedge pattern.
The Ongoing BTC Price Decline Indicates a Prolonged Downtrend
The persistent downtrend that began in July and continued through August and into September is merely an extension of the previous breakout from the rising wedge pattern. This trend projects a potential decline of 36.63%, targeting a price of $18,940. Approximately 10% of this drop has already been realized, with an additional 26% potentially on the horizon.
In the context of the weekly chart, the most critical support level to watch is the 200-week Exponential Moving Average (EMA) marked in purple, positioned at $25,586. Bulls will need to vigorously defend this level to maintain any hope of a reversal. Currently, Bitcoin is trading below both the 50-week EMA (red) and the 100-week EMA (blue), indicating a prevailing advantage for the bears.
The Relative Strength Index (RSI) has maintained a pessimistic outlook since April, potentially necessitating a descent into oversold territory before any significant BTC price reversal can materialize. The RSI’s formation of a negative divergence with the price should have served as an early warning signal, indicating that Bitcoin was not poised for a bullish rally, despite its brief ascent to $32,000.
In the current market climate, short positions in BTC remain lucrative, as bulls continue to search for more robust support levels. Traders might consider securing profits incrementally to guard against sudden bear traps created by short-term price fluctuations, which, apart from triggering liquidations, tend to lack sustainability. With that in mind, potential exit points for shorts or entry points for short-term long positions can be found at $24,000, $22,000, and $20,000.
Short-Term Bitcoin Investors Succumb to Pressure
Short-Term Bitcoin holders forced into capitulation: 14% supply decrease in profit – according to ARK Invest. Despite the prevailing bearish sentiment, analyst Ben Lilly suggests that this phase could herald the start of a new bull run, drawing parallels with Bitcoin Dominance trends in 2018 and 2019. Lilly expressed his optimism in a written statement, declaring, ‘Bitcoin is poised to reassume its leading role.’
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