Bitcoin has lost all the gains it made last Saturday, now trading under the critical $60,000 level as of this Wednesday morning. Following a short-lived rise above $64,000 earlier today, it tumbled down to a low of $59,900—a sharp drop of over 3% within just 24 hours, reaching its weakest point since the start of March. At press time, it’s lingering at around $60,400.
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Current Trading Dynamics
On the Binance exchange, the most active Bitcoin trading pair (BTC-USDT) shows a huge number of buy orders stacked below $60,000. This outweighs the sell orders, suggesting a strong market demand at these lower levels which might prevent further immediate losses.
Nonetheless, Bitcoin has fallen over 15% from its most recent peak, and altcoins have not been spared either, experiencing dips ranging from 40%-50%. Such declines mirror typical behaviors in previous bull market corrections, according to data from Glassnode. But despite the visible buy zones, major investors appear hesitant to buy the dip.
Technical Analysis and External Factors
The Wyckoff method, a popular technical analysis tool, also points to potential further declines. Stockmoney Lizards’ recent analysis via a tweet indicates that Bitcoin is currently in what is termed as the “sign of weakness” phase of the Wyckoff Distribution Model; a stage often characterized by a reduction in demand leading to a possible price drop.
This is made worse by external economic factors such as the Federal Reserve’s ongoing high interest rate policy and increasing tensions from the Iran-Israel conflict, which are making investors risk-averse.
Since the onset of the Iran-Israel conflict on April 12, Bitcoin ETFs have seen nearly $150 million in outflows, indicating a broad-based flight from riskier assets.
On the technical front, the price has been pushed back from the $70,000 resistance level and is heading towards a retest of the $60,000 support zone. Breaking below this could likely lead to a steep decline toward the $55,000 level.
Conversely, if Bitcoin can surge past $68,000 again, reaching new heights could be just around the corner. However, with the Relative Strength Index (RSI) currently below 50%, the likelihood of a breakdown remains high and could potentially lead to severe market consequences.
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