The Bitcoin (BTC) price steers through a turbulent period where the value is oscillating around the $110,154 mark. After hitting a record high of $124,457, the largest cryptocurrency has entered its corrective phase, as it has lost about 12% in 13 days.
Following this, traders are particularly interested in whether this consolidation would lay the foundation to another breakout or a further pullback is under construction.
Long-term Holders Have Already Realized More Profit
As per the latest data from Glassnode, the long-term Bitcoin holders are also collecting profits in this cycle to an extent with the sole exception of the rally that occurred between 2016 and 2017. Moreover, the increase in realized gains which suggest a rise in selling pressure as investors have opted to secure profits during the recent highs.
Notably, these periods are traditionally accounted for by volatility and outflow of long-term investors. This also signals that Bitcoin is potentially a more mature phase of its current cycle.
Bitcoin Breaks Below Its Key Support Of $112,000
The provided daily chart for BTC shows a clear bearish structure. The price is trading within a descending channel, characterized by multiple red candles in the last two weeks. This pattern indicates that sellers are currently in control of the market.
A reversal attempt was failed at $117,429, as BTC is currently battling to consolidate above the very important psychological support of $110,000.
The short term weak spot is reflected in the exponential moving averages (EMAs) as BTC is traded below the 20-day and 50-day EMAs ($114,935 and $114,521) respectively. More recently, Bitcoin has dropped below its 100-day EMA with the most recent candle recording a retest at that level ($110,798.66).
This is an indication that the selling pressure is still in charge in the short run. Notably, this indicator is a trend-following indicator that gives more weight to recent price data.
Adding to this, the downward channel marked on the chart also signifies a measure of selling activity. However, the volume spikes express that aggressive buying might take place at the current levels.
The Bear Bull Power (BBP 13) indicator has dropped into negative figures and is currently at -8,909, which suggests a declining momentum. This further highlights that it could retest lower supports and hence have a decisive reversal.
The Relative Strength Index (RSI) is currently at 37.35, trending downwards. This shows waning buying momentum and suggests the price has further room to fall before reaching oversold territory (typically below 30), where a bounce could be anticipated.
The Moving Average Convergence Divergence (MACD) indicator confirms the bearish outlook. The MACD line is below the signal line, and the histogram is negative, which points to sustained downward momentum. A bearish crossover occurred in late July/early August, and the separation between the lines indicates the trend is still strong.
Will BTC Rise Back Up?
If bears take control, immediate support lies at $110,485, followed by $107,656 and $105,005. A failure to defend these levels could drag BTC toward the 200-day EMA at $103,739, which may act as the ultimate safety net for bulls.
On the flip side, a recovery above $114,500 and $116,092 would be vital to flip momentum back in favor of buyers. Sustained strength above these levels could open the doors for a retest of $121,000 and potentially $124,457 in the upcoming time.
Also Read: Boyaa Interactive Buys $33M More Bitcoin, Hits 3,670 BTC
Disclaimer: The Crypto Times does not endorse or promote this digital asset in any manner. This article was created only for educational purposes. Make sure to “DYOR” as the market is highly volatile. New positions should be done by traders being careful and awaiting volume-backed breakouts.
