Analyst Predicts Bitcoin Could Plunge Back To $51,000 On Wedge Pattern Breakdown
07 Agosto 2024 - 3:00AM
NEWSBTC
Bitcoin may be experiencing a price recovery towards the $57,000
level after a sharp 20% drop on Monday that sent the largest
cryptocurrency on the market to a low of $49,000 not seen since
February. Still, BTC is not out of the woods yet, as a concerning
pattern has emerged on its 10-day chart. Analysts Spot
Bearish Signals According to technical analyst Ali Martinez,
Bitcoin is forming a rising wedge pattern, a bearish continuation
pattern often linked to further downtrends. While BTC may
climb as high as $57,000 at the upper boundary of the wedge,
Martinez warns that investors should look for a potential breakdown
that could pull the cryptocurrency back down to around $51,000.
Related Reading: UNI Price Bounces Back 13% Above $5.6, Can Bulls
Maintain Control? Martinez also highlighted that one of Bitcoin’s
key support levels, based on its market value to realized value
(MVRV) pricing bands, is currently at the $54,000 mark. This level
is crucial in preventing a more substantial drop towards the
$40,000 region. Conversely, if the $54,000 support holds, the
analyst sees the key resistance on the upside at $67,000. Another
analyst, Rekt Capital, has also observed that Bitcoin is showing
signs of attempting to recover and fill the new CME gap above with
the currency’s current price recovery of 4.5% recorded in the last
hours, which ranges from $59,400 to $62,550. However, the
analyst noted that a smaller CME gap has formed at a slightly lower
level, between $53,700 and $54,600, which any short-term dip in the
market could potentially fill. Reasons For Optimism In Bitcoin
Market Amidst these bearish technical indicators, there is a
glimmer of optimism, as according to Ki Young Ju, the founder and
CEO of market analysis firm CryptoQuant, several key metrics
suggest that the bull market remains intact despite the recent
pullback. According to Ju, one of the key signs is the recovery in
Bitcoin’s hashrate, a measure of the computing power dedicated to
the network. Ju contends that miner capitulation is nearly over,
with the hashrate nearing all-time highs. This is
significant, as US mining costs are approximately $43,000 per BTC,
indicating that the hashrate will likely remain stable unless
prices dip below this level. Additionally, Ju has observed
significant inflows of Bitcoin into custody wallets, indicating
that large institutional investors, or “whales,” are actively
accumulating digital assets. The analyst noted that Permanent
Holder addresses, which hold their Bitcoin for over 3 years, have
increased by 404,000 BTC, including 40,000 BTC in US spot Bitcoin
exchange-traded funds (ETFs) over the past 30 days. Related
Reading: XRP Whales Take Advantage Of 20% Drop To Buy Millions
Worth Of Tokens In contrast to the increased whale activity, Ju has
observed a relative absence of retail investors, similar to the
market conditions in mid-2020. This could be interpreted as a
positive sign, as it indicates that the current price movements are
not driven by speculative froth but rather by institutional
investors’ strategic accumulation of Bitcoin. Lastly, Ju noted a
reduction in the selling pressure from long-term Bitcoin holders,
or “old whales,” who sold their holdings to new whales between
March and June. The analyst believes that the lack of
significant selling pressure from these experienced investors is a
bullish signal, as it suggests that a new generation of
institutional players is now shaping the market with a more
long-term outlook. At the time of writing, BTC is struggling to
break above its current price level of $56,670 while trimming
losses in larger time frames, which amounted to 13% last
week. Featured image from DALL-E, chart from TradingView.com
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