Bitcoin Drops, Investors Eye $58k Bullish Trend Amid Market Uncertainty

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Bitcoin (BTC) recently showed signs of significant upward momentum but has since experienced a notable price correction. After reaching a two-month high of $66,500 last Friday, the cryptocurrency retraced approximately 6% over the past week to around $60,000 by Thursday.

The initial bullish trend for Bitcoin was spurred by easing economic conditions, especially following the US Federal Reserve’s decision to cut interest rates on September 18. However, escalating geopolitical tensions in the Middle East have shifted investor sentiment, prompting many to seek refuge in traditional safe-haven assets like gold.


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Additionally, concerns about the macroeconomic landscape have intensified, particularly after Fed Chair Jerome Powell suggested the possibility of further rate cuts of 0.50% in the coming months. This confluence of factors has led to a broader market sell-off, with Bitcoin, Ethereum, and other top cryptocurrencies experiencing substantial liquidity outflows estimated at nearly $300 million, as reflected in the total crypto market capitalization.

Despite the recent decline, crypto analyst VirtualBacon provided a more optimistic outlook on social media, noting that Bitcoin has returned to the “Bull Market Support Band.” This support band has historically provided a cushion during corrections between the current market prices and the $62,500 mark on the weekly timeframe.

VirtualBacon emphasized that a weekly close above $58,000 could indicate a healthy correction, setting the stage for a resurgence. Conversely, a break below this threshold would necessitate reevaluating bullish strategies. The analyst pointed to two key buy zones: $62,500 and a lower range between $58,800 and $60,000. These zones coincide with previous highs and align with the 200-Day Exponential Moving Average (EMA), a significant long-term support level for any bull market.

The 200-Day EMA, currently around the $60,000 mark, has been pivotal over the past six months. It has acted as both support and resistance during various phases of Bitcoin’s price movements in March, May, and July of this year.

In his analysis, VirtualBacon explained that if Bitcoin bounces back from $60,000, it would signal strength in the market. However, a daily close below $58,000—or a weekly close below that level—could indicate a potential bearish trend reversal. The analyst outlined a strategy for capitalizing on the current dip, suggesting an accumulation of BTC in the $58,000 to $60,000 range, which he views as a high-risk, high-reward zone. Nonetheless, he cautioned that a close below $57,000 would be a significant red flag.

For the analyst, as long as Bitcoin holds above $58,000, there is potential for a higher low, setting the stage for a new price peak above $66,000. However, macroeconomic factors will remain crucial in shaping market sentiment.

This week’s release of the September jobs report will be particularly significant, as it will provide insights into the current unemployment rate, which could influence future Bitcoin price movements, according to the analyst. A 4.2% unemployment rate would be very bullish for the market, 4.3% would present a neutral outlook, 4.4% would advise caution, and rates of 4.5% and above would have bearish implications.

At the last Federal Open Market Committee (FOMC) meeting, Jerome Powell identified 4.4% as a critical threshold. Should the unemployment rate rise above this level, VirtualBacon believes it could signal trouble for the broader economic landscape.