Brighter days ahead for Bitcoin (BTC)? Analysis of August 22, 2023

After several weeks testing the $30K zone, bitcoin has come to register a drop of over 10%. Let’s explore the outlook for the leading cryptocurrency.

BTC situation

As we mentioned in our August 15 analysis, the low-volatility barometer on the bitcoin price warned of its return. Reaching a low, it eventually rebounded, unfortunately dragging bitcoin below $26K. The price of the leading cryptocurrency is forming a double top and is now below the daily 50 and 200 moving averages, leaning gradually southwards. Meanwhile, the RSI and MACD are showing bearish momentum. Each of these elements is likely to challenge buyers.

The current technical analysis was made in collaboration with Elie FT, investor and passion trader in the cryptocurrency market. Now a trainer at Family Trading, a community of thousands of own-account traders active since 2017. There you’ll find live streams, educational content and mutual support around the financial markets in a warm, professional atmosphere.

According to data platform CryptoQuant, bitcoin recorded a liquidation of over $230 million in long positions. This is a record since the beginning of 2023. This may suggest selling pressure that should not be underestimated if not to the benefit of buyers.

Conveniently, open interest was revised downwards. According to the same platform, the equivalent of $2.8 billion has vanished from the market. This demonstrates a clear reduction in investor activity on BTC, which may be contributing to the weakening of anticipation of future bitcoin movements.

What if all this isn’t enough?

The liquidity map available on Decentrader shows that there are many buying volumes below the current BTC price. These range roughly from $12K to $25K. With the peak of these buying volumes at $22,700, we can understand the importance of this level.

Bitcoin price scenarios

If the Bitcoin price recovers by breaking through the $28K resistance level, we could anticipate a bullish continuation up to the psychological $29-30K threshold. The next resistance to be taken into account at this stage will be the 2023 ATH of the Bitcoin price, i.e. approximately at $32K.

If the Bitcoin price fails to bounce back from the $25K zone, we might consider testing the $24K zone. Unfortunately, if the latter support fails to hold, the BTC price could attack the $23-22K zone more or less quickly.

Conclusion

It’s now a done deal. Bitcoin has regained its characteristic volatility. The price of BTC is now resting on supports that must be defended if it is to maintain its downward momentum. It will be important to keep a close watch on the price’s reaction at the various levels identified, in order to confirm or refute the various hypotheses made. Watch out for potential “fake outs” and “market squeezes” on each of these situations. And remember that these scenarios are based solely on technical analysis. Cryptocurrency prices may evolve more or less rapidly, depending on other, more fundamental factors