8 August 2024
After enduring a substantial drop to a seven-month low earlier this week, Bitcoin (BTC) showed resilience by reclaiming ground above the $57,000 threshold on Tuesday, sparking optimism among bullish investors who hoped that the worst of the downturn was behind them.
However, the leading cryptocurrency has quickly retraced over 3% in the past few hours, slipping back towards the $54,900 level, suggesting a possible continuation of the prevailing downtrend.
BTC’s CME Gap & Bearish Indicators
Crypto analyst Rekt Capital weighed in on the situation, noting Bitcoin’s repeated retracements following unsuccessful attempts to stabilize at higher levels. Rekt Capital pointed out that Bitcoin stands on the verge of filling the CME Gap positioned between $53,700 and $54,600.
While acknowledging the proximity of the current price at $54,900 to this gap, there’s uncertainty surrounding the necessity of filling it, especially considering its relatively minor size.
The analyst mused on the possibility that this downward movement could merely signify a volatile daily retest around the $55,800 support level, which aligns with the lows seen in early July.
However, if the CME Gap does require filling, doing so sooner rather than later, while the price remains in close proximity, could be a strategic move, according to Rekt’s analysis.
Adding to the bearish indicators, Julio Moreno, Head of Research at data analytics firm CryptoQuant, highlighted a significant observation regarding the Bull-Bear Market Cycle Indicator.
Moreno flagged a bear phase for the first time since January 2023. Previous instances of the indicator signaling bear phases coincided with major market events like the COVID-induced sell-off in March 2020 and the Chinese mining ban in May 2021, accurately predicting the onset of bearish trends in November 2021.
$50,000 Bitcoin Support At Risk?
Crypto firm Material Indicators has also shared bearish predictions in the near term for the Bitcoin price, raising red flags concerning Bitcoin’s bullish momentum. Observing a scenario where Bitcoin bulls are seemingly under siege, the firm notes a stabilization in BTC bids around the $50,000 mark.
However, the cautionary tone emerges as they brace for a potential dip towards a crucial support level at $45,000 if the $50,000 mark fails to hold firm.
Adding to the market sentiments, market expert Jesse Olson has detected a pending sell signal on Bitcoin’s weekly Heikin Ashi chart. This signal, if confirmed, would mark only the fifth such occurrence since 2021, indicating a significant shift in market dynamics.
Ultimately, it becomes increasingly apparent that Bitcoin must exhibit robust bullish momentum in the days ahead to counteract the intensification of the current downtrend.
Revisiting its all-time high levels of $73,700, achieved in March, now appears contingent upon sustained upward movements to offset the prevailing market pressures.
Featured image from DALL-E, chart from TradingView.com