As a seasoned crypto investor with a few years under my belt, I’ve seen enough market cycles to know that every downturn is just another opportunity for growth. The recent “death cross” on Bitcoin’s short-term charts and the subsequent sell-off have left many investors shaken, but I’m not one of them.
In simpler terms, the leading digital currency, Bitcoin (BTC), has displayed a “death cross” pattern on its short-term price charts. This development follows a significant drop in the cryptocurrency market, with Bitcoin reaching a low of $49,050 during yesterday’s trading period.
By Monday morning, a total market value of more than $370 billion was wiped out from all cryptocurrencies over a 24-hour period. Bitcoin saw its steepest one-day decline in three years during this time. Many of these losses were connected to a global market downturn, as equities dropped worldwide.
A “death cross” happens when a quick-moving average line drops beneath a slow-moving average line. This event often indicates a possible shift towards downward market trends.
For Bitcoin, it appears that a commonly seen pattern has materialized on the four-hour chart. Specifically, the 50-hour moving average has dropped below the 200-hour moving average, which is often interpreted by market analysts as a sign of potential bearishness.
Crypto market recovers
On Tuesday, cryptocurrencies partially recouped the losses experienced the day before. After hitting a six-month low on Monday, Bitcoin is gradually regaining strength following the debut of the newly introduced crypto ETFs, which faced their initial significant challenge.
In the moment I’m typing this, Bitcoin has increased by 9% over the past day, reaching a price of approximately $54,851, as per information from CoinMarketCap.
As an analyst, I’d like to draw your attention to some crucial levels in the Bitcoin market as the price appears to be bouncing back. These levels have been identified by on-chain analytics firm, IntoTheBlock.
Bitcoin appears to be making a slight comeback, increasing approximately 2% within the past hour. Here are some crucial points to keep an eye on:
— IntoTheBlock (@intotheblock) August 5, 2024
As reported by IntoTheBlock, there’s a broadly spread resistance level. However, at $55,500 and $60,500, two price points with significant historical trading volume catch the eye.
Conversely, should the downtrend persist, a substantial portion of demand will be found beneath $50,000, with robust support expected approximately at $47,500.
During the recent price drop, Bitcoin wallets that held between 1,000 and 10,000 Bitcoins demonstrated faith by continuing to accumulate more coins. In contrast, smaller wallets with less than 1 BTC appeared nervous, experiencing a significant decrease in their holdings during yesterday’s market slide.
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2024-08-06 17:23