Bitcoin Consolidates: Is an Increase or Decrease Coming in the Crypto Market? Analysis from August 21, 2024

After a slight rebound following the crypto market downturn, Bitcoin has entered a consolidation phase. Let’s analyze the future prospects of BTC’s price together.

Bitcoin (BTC) Price Situation

After significantly dropping due to fears of a recession in the United States, Bitcoin hit a low at $49,200. It is at this level that the leading cryptocurrency regained strength, rebounding by nearly 28%. Bitcoin thus reached a peak at $62,800. Unfortunately, this bullish momentum started to wane from that point. Afterwards, BTC’s price began a consolidation phase, trading roughly between $56,000 and $62,800.

At the time of writing this text, the Bitcoin price is trading around $59,700. Although the short-term structure seems to be turning bullish again, the medium-to-long-term trend of the cryptocurrency is uncertain. Indeed, even though BTC has rebounded, it remains below its 50 and 200-day moving averages, which have recently formed a “death cross”. Nevertheless, we can be reassured by the fact that Bitcoin’s price has re-entered its annual and weekly VWAP. Additionally, it seems on the verge of holding above the control point defined since Bitcoin’s last low. On the cryptocurrency’s momentum side, it still appears weak despite a small rebound that seems moderately supported. This is reflected in BTC’s price itself as well as its oscillators.

The current technical analysis was conducted in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today, he is a trainer at Family Trading, a community of thousands of proprietary traders active since 2017. There, you will find Lives, educational content, and mutual support around financial markets in a professional and friendly atmosphere.

Focus on Derivatives (BTC/USDT)

The latest fluctuations in Bitcoin have been accompanied by a slight increase in open interest. Unfortunately, this increase occurred while the CVD overall declined. This could indicate that speculators’ outlook on Bitcoin’s future price is rather pessimistic. This hypothesis is reinforced by the funding rates, which have recently oscillated between positive and negative. On the liquidation side, they remain insignificant, demonstrating a relatively stable market phase.

The liquidation heatmap of the last three months indicates that BTC/USDT reached the liquidation zone around $61,500. It seems that the cryptocurrency triggered sales at this level, leading to a downward reaction. Currently, notable liquidation zones are mainly above Bitcoin’s current price. A new zone has appeared around $62,000. Higher up, we can note the subtle zone just below $66,000 and the one just above $67,000. More significant, we can also mention the zones above $70,000 and $72,000. Below the current price, we can highlight a weak zone around $54,500. If the market approaches these levels, we could witness a massive triggering of orders, potentially increasing the cryptocurrency’s volatility. These zones, therefore, represent major points of interest for investors.

Hypotheses for Bitcoin (BTC) Price

• If Bitcoin’s price holds above $56,000, one could anticipate reaching $62,800, or even $63,000. The next resistance to consider would then be around $65,600 or even $67,000. If the bullish movement continues, one could foresee a continuation of the movement up to $70,000 or even $72,000. At this stage, this would represent an increase of nearly 20%.

• If Bitcoin’s price fails to hold above $56,000, one could envisage a return around $55,000. The next support to consider, if the bearish movement continues, would be around $53,400. Lower, we can note the support at $49,200. At this point, this would represent a decline of about 18%.

Conclusion

In summary, while Bitcoin has shown signs of recovery after a significant drop, its future remains uncertain. The cryptocurrency is in a consolidation phase, and despite some positive indicators, the overall momentum remains fragile. Therefore, it will be crucial to closely observe the price’s reaction to different key levels to confirm or refute the current hypotheses. It’s also important to stay vigilant to potential market “fake outs” and “squeezes” in each scenario. Finally, let’s remember that these analyses are based solely on technical criteria and that cryptocurrency prices can also change rapidly depending on other more fundamental factors.