Bitcoin is trending lower at the time of writing, cooling off after an encouraging uptrend on August 23. While the uptrend remains, with the coin not far from $63,000, the possibility of sellers pressing in cannot be ruled out. Matching the early August decline could trigger another wave of liquidations, triggering panic.
Bitcoin Shaky, First Two Levels to Watch
Technically speaking, Bitcoin is in a breakout pattern from the bull flag established after the August 8 expansion.
Additionally, from a volume analysis perspective, bulls have a chance as prices are still in the August 23 bull zone. As long as trading volumes remain delicate and prices continue to decline, buyers could come back and push prices above $66,000.
Still, assuming Bitcoin bears have the upper hand, one analyst at X thinks it will be critical for traders to closely watch how prices react to the following four reaction lines. From Bitcoin’s underlying cost comparison via CryptoQuant, the first support level, currently resistance after the ongoing decline, is $63,450.
The analyst said that at this price point, this is the average price at which fresh whales are buying BTC. The question remains whether prices will rebound and print above $64,000 in the coming days.
However, the fact that whales are in the picture is positive. Typically, whales, unlike retailers, tend to be HODLers and don’t get shaken out when prices fluctuate.
If bears are persistent and prices fall below $60,000, the analyst continued that traders should watch for prices to react at the $55,540 level. The trader’s analysis shows that Binance users have placed their support at the $55,540 level. Therefore, a price drop below this level could easily trigger a panic sell-off as traders on the exchange seek safety.
Miners and Long-Term Holders: The Final Walls
A level deeper, the key support level will be $44,400. This is the zone where most miners are considered profitable. As long as prices fluctuate above this line, most miners, most of whom are whales, can HODL, expecting prices to rise. In early August, Bitcoin fell sharply but did not break through this zone, which highlights its importance to BTC price action.
Below that, $25,000 is the next accumulation level that investors will be looking at if there is a general decline. $25,000 is the average price that long-term holders (LTH) have been buying at. LTH are those who bought BTC more than 155 days ago.
This cohort mainly includes whales and believers online. Technically, a break below $50,000 and the August 2024 lows could set the stage for another drop to $40,000 and worse.
While bears may be taking control, there are also supportive factors that continue to spur bulls. One of the world’s largest asset managers, BlackRock, recently added BTC to its Strategic Global Bond Fund as a hedge against customary assets. Its spot Bitcoin ETF, IBIT, is already stores billions of BTC on behalf of its institutional clients.
Featured image from DALLE, chart from TradingView
