Is BTC About To Fall Towards $56,000 Or Will The Bulls Come In Soon? (Bitcoin Price Analysis)

After a modest bullish rally from the substantial support level of $59,000, Bitcoin encountered selling pressure, returning to the critical 100-day moving average at $61,000.

Price action around this crucial juncture is likely to dictate its next decisive move.

Technical Analysis

By Shayan

The daily chart

A close examination of the daily chart reveals Bitcoin’s extended sideways consolidation phase near the pivotal $60,000 price range. Recently, the cryptocurrency witnessed a decline after a notable bullish rally from the $59,000 threshold, which led to a pullback towards a critical support region.

Bitcoin sellers have been struggling to breach this important support area, which includes the 100-day MA and Fibonacci level of 0.618 ($59,395), for several weeks. However, a sudden drop below the critical $59,000 level could trigger another notable downside move towards the $56,000 threshold.

Conversely, this fundamental juncture also has the potential to halt further downward pressure and provide medium-term support. Therefore, the price action around it will be crucial in anticipating Bitcoin’s future movements.

Source: TradingView The 4-hour chart

Analysis of the 4-hour chart reveals increased buying pressure near the critical $58,000 mark, leading to a bullish surge towards the $66,000 threshold. However, increased selling pressure around $66,000 led to a notable downtrend, bringing the price back to the crucial $60,000 support region.

Currently, sellers are trying to push the price below the significant support level of $60,000 and the lower boundary of the wedge. If successful, it could mean a more sustained bearish phase, targeting the critical $56,000 support region.

However, given the prevailing market sentiment, Bitcoin may continue to consolidate or experience slight lower-level dips before gaining enough bullish momentum to start a new uptrend. Traders should closely monitor price movements around these key levels for possible changes in market sentiment.

Source: TradingView chain analysis

By Shayan

Profitability is central to market psychology, especially when macroeconomic conditions do not favor risky assets. Analyzing participant returns therefore provides valuable insight into the state and sentiment of the market. The chart illustrates the Supply Input Profit (%) metric, which represents the ratio of Bitcoin supply profit.

As shown in the chart, the metric has recently risen to its highest levels, indicating that many participants may be thinking of taking profits, which may lead to more selling pressure. Historically, these highs have often preceded market volatility and potential declines as holders begin to liquidate their positions.

However, despite a notable drop in the metric, the price has seen only a slight consolidation, suggesting that the recent drop could be a corrective move triggered by profit-taking. It is plausible that once the correction stage is concluded, the price is likely to start another impulsive rise.

Source: CryptoQuant SPECIAL OFFER (Sponsored) Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

LIMITED OFFER 2024 for CryptoPotato readers on Bybit – Use this link to register and open a $500 BTC-USDT position on Bybit Exchange for free!

Disclaimer: The information found on CryptoPotato is that of the quoted writers. It does not represent CryptoPotato’s views on whether to buy, sell or hold any investment. You are advised to do your own research before making any investment decisions. Use the information provided at your own risk. See disclaimer for details.

TradingView Cryptocurrency Charts.