Bitcoin Price Analysis: Should Investors Look for Shelter or Perceive an Opportunity?

Bitcoin price analysis with potential buying opportunities and market trends.

Posted 8 months ago in Market Analysis

Bitcoin Price Analysis

Bitcoin stands at the edge of a bearish breakdown, with a small possibility that the $25,000 support level could hold.

On Sept. 11, Bitcoin (BTC) broke from its parallel range between $25,500 and $26,500, falling to an intraday low at $24,950. A daily close below $24,750 threatens a drop to the sub-$20,000 range, but there’s a slight chance that the bullish momentum could revive.

According to pseudonymous trader Horse, Bitcoin at $25,000 presents a short-term buying opportunity, as it’s the “best area to trap sellers” and “arguably the best place for long contextual” risk-to-reward ratio. I feel like the chances that the market smokes this level after the first major test is slim. Seems like the best area to trap sellers, and arguably the best place for long contextual R:R I'll catch a falling knife.

The price action in global markets and on-chain indicators tapping historical lows could give buyers hope that a positive trend could thrive. Bitcoin tends to maintain a negative correlation with the U.S. dollar and a positive correlation with stocks.

On Sept. 11, when the S&P 500 and Nasdaq stock market indexes were trading higher, the U.S. Dollar Index (DXY) was falling. The DXY is tapping its long-term range high levels around 104.8 points, hinting at the possibility of a negative price reversal.

A bearish dollar could add tailwinds to Bitcoin’s price. The Consumer Price Index (CPI) print in the United States on Sept. 13 will likely provide a decisive direction to the global markets.

According to the latest report by on-chain analytics outlet Glassnode, Bitcoin’s price drop over the last few weeks has caused several metrics to tap historical lows. The current market conditions are characterized by low liquidity and low trading volumes. While this complicates bulls’ ability to push the BTC price through multiple resistance levels, long-term holders could start to accumulate as bullish hype cools down.

According to Glassnode:

Moreover, Bitcoin’s negative price action since mid-August has seen a “vast majority” of short-term supply plunge “into an unrealized loss,” which could act as a potential short-term reversal level. However, Glassnode also noted that “volatility, liquidity, trade volumes and on-chain settlement volumes are at historical lows,” which has pushed the market into “extreme apathy, exhaustion, and arguably boredom.”

Thus, a lot of sellers may arrive in case of a bullish reversal, especially near the break-even level of short-term buyers around the $26,000 level. Combined, the price action of the DXY and on-chain data suggest that buyers could return sooner than expected, making the current price action a potentially lucrative opportunity to open Bitcoin longs.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Last updated 9/11/2023, 9:42:19 PM


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