Bitcoin drops below $29k after months of struggling to stay afloat

Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.

• Bitcoin’s market structure showed that a further downturn was possible.
• This process can take some time and traders can keep an eye on liquidity in the north for selling opportunities.

Bitcoin [BTC] seemed to have decided on the direction of its next big price move. After the shift in market structure in July, the bears have been slowly but surely pushing BTC down. Selling pressure has increased over the past three days.

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A recent report highlighted findings that supported the idea of ​​a bearish move for BTC. The price action and momentum also favored the sellers. How low can the correction go? Just as importantly, how long could this downward movement last?

Bitcoin volatility is increasing after falling below $29.1k

Source: BTC/USDT on TradingView

The Fibonacci retracement levels for the June rally showed that there were more support levels in the South. The $28.3k and $27.5k levels have been significant since March. BTC could remain on the chart for an extended period of time at those levels and move sideways.

The market structure on the daily chart turned bearish on July 24 as Bitcoin fell below the $29.5k level, revealing bearish intent. In the past three days, the $29.1k level was also ceded to the sellers.

The OBV fell below a near-term support level, indicating that selling pressure had won this battle. The RSI has also been below the neutral 50 since mid-July to highlight bearish momentum.

A retracement as deep as the 78.6% level at $26.3k was possible. However, such a step may not come about immediately. It could take weeks and the price could bounce higher just to accumulate liquidity and mislead early, hopeful buyers. Therefore, investor caution may be warranted.

The exchange outflow suggested that accumulation was possible

Source: Sanitation

The factors examined so far suggested that a further downward trend was likely. The on-chain stats showed that long-term buyers were probably already accumulating Bitcoin. The average coin age of 180 days has moved higher over the past three weeks.

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The exchange rate balance recently showed a large coin outflow, reinforcing the idea that buyers are withdrawing BTC to keep in cold storage. The MVRV ratio also decreased.

This does not mean that a reversal is imminent, but that there was some bullish presence despite the bearish price action.