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Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Bitcoin recovered all of its recent gains and showed bears remained dominant.
- A BTC drop below $25,000 could lead to further massive losses in the crypto market.
Bitcoin [BTC] has a bearish market structure on the 1-day chart. The higher time frame chart here was the weekly chart, which showed BTC bulls desperately clinging to the USD 25,000 support zone. A drop below $24.8k would flip the HTF structure and the king could move back towards $20k.
Read Bitcoin’s [BTC] Price Forecast 2023-24
The grayscale victory against the SEC increased whale interest. At the same time, miners are facing cost pressures, but miner reserve outflows have leveled off over the past week. Still, it doesn’t rule out forced sales by the miners to cover costs.
Bitcoin was trading in a zone that needs to be defended from the bulls
Source: BTC/USDT on TradingView
The cyan box at $25k represented a bullish order block on the daily chart. This block spanned from $24.8k to $26k. As of mid-June, BTC was trading within a range of $24.8k to $31.8k.
The $25k area served as resistance in February and March this year. Therefore, their retest in support is a major event, and a fight the bulls need to emerge victorious. A one-day session below $24.8k would likely signal that the bulls are exhausted and that Bitcoin is preparing to drop to $20k, the next area of interest on the daily chart.
The OBV did not move significantly due to the lower volume since April, but the lower terms showed that the OBV has been on a downward trend since mid-August. The RSI agreed with the price structure, showing that a bearish trend had been going on since July 24, when a bearish market structure break occurred on the D1 chart.
Such lower volatility meant that a sharp move to either side was possible in search of liquidity before a reversal – and August 29 was a good example of that. The gains from the Grayscale news were recovered in full, a sign that bulls have little say in the market.
The rising average coin era offered some hope for the beleaguered bulls
Source: Sanitation
The MVRV ratio has been negative for the past few weeks, pointing towards an undervalued Bitcoin. However, it was unclear whether the selling pressure has come to an end. The age consumption metric has seen some spikes over the past two weeks, suggesting sellers have the upper hand.
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Conversely, the average coin age has moved higher since the end of July, even though Bitcoin saw a major drop 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 long time horizons shouldn’t focus too much on price action.
