Bitcoin, the flagship cryptocurrency, is currently experiencing a downward trend, cooling off after an optimistic rise on August 23. Although the overall uptrend remains intact and the coin is hovering just below $63,000, the potential for sellers to gain momentum cannot be overlooked. The recent dip mirrors a drop from early August, which could ignite a wave of liquidation and provoke panic among investors.
Technically, Bitcoin is nestled in a bullish breakout pattern, building on a bull flag formation that emerged following an expansion on August 8. From a volume analysis standpoint, bullish sentiment could prevail since prices are still confined within the bullish bar set on August 23. As long as trading volume remains subdued while prices drift lower, buyers might seize the opportunity to drive prices above the $66,000 mark.
Even so, should the bears regain control, one analyst on X suggests that traders should watch how Bitcoin reacts to key levels. According to CryptoQuant, the first support level, now acting as resistance due to the recent decline, is $63,450. This is reportedly the average price at which new whale investors acquire Bitcoin. Whether prices will rebound and rise above $64,000 in the coming days remains to be seen.
The involvement of whales, large Bitcoin holders, is generally considered a positive indicator. Unlike retail investors, whales tend to hold onto their assets despite price fluctuations. However, if the bearish trend persists and prices fall below $60,000, the next critical level to monitor is $55,540. Binance users have identified this price point as a support level, and a drop below it could trigger panic selling as traders rush to minimize losses.
Looking further down, a crucial support level is $44,400, where most miners are thought to remain profitable. As long as Bitcoin trades above this price, many miners, who often double as whales, tend to hold onto their holdings in anticipation of future gains. This level held firm during a significant downturn in early August, underscoring its importance.
If a broader collapse occurs, $25,000 is another significant level to watch. This is the average price at which long-term holders (those who bought Bitcoin over 155 days ago) acquired their assets. This group, predominantly comprising whales and network loyalists, could use this accumulation zone as a buffer should prices fall dramatically.
While potential bearish outcomes exist, there are also factors favoring the bulls. One of the world’s largest asset managers, BlackRock, has recently included Bitcoin in its Strategic Global Bond Fund as a hedge against traditional assets. The company’s spot Bitcoin ETF, IBIT, already holds substantial amounts of Bitcoin for its institutional clients, providing additional support for the market.
While Bitcoin’s current price trends sideways, trading between critical levels, market participants will continue to closely monitor its movements, drawing insights from technical patterns and volume analysis to anticipate the next significant move.
