Observing a consistent downward trend, the value of Bitcoin has plunged, with Bitcoin falls below $29k making headlines. The market structure of the digital currency indicates potential for further descent. Traders are urged to be vigilant of northern liquidity for selling possibilities.
Bitcoin’s Direction in the Price Spectrum
Following a shift in market structure in July, Bitcoin’s value has been steadily decreasing. Over the past few days, the selling pressure has escalated. The price action and momentum are currently favoring the sellers. This raises two crucial questions: how low will the correction dip, and how long will this downward trend continue?
Bitcoin’s Volatility and Support Levels
Bitcoin’s volatility surged after it dropped below the $29.1k mark. The Fibonacci retracement levels of the June rally indicate more support levels further south. The $28.3k and $27.5k levels have been significant since March, and Bitcoin could possibly stall and move sideways at these levels for an extended period.
The market structure on the daily chart flipped to bearish on July 24 when Bitcoin falls below $29k, indicating a bearish inclination. Over the past few days, the $29.1k level has also been conceded to the sellers. The On-Balance Volume (OBV) fell below a short-term support level, signifying that selling pressure is currently prevailing. The Relative Strength Index (RSI) has also been below neutral 50 since mid-July, further emphasizing the bearish momentum.
Bitcoin Accumulation and Exchange Outflows
Despite the bearish price action, on-chain metrics suggest that long-term buyers are likely accumulating Bitcoin. The 180-day mean coin age has been on the rise over the past three weeks. This is further reinforced by a large outflow of coins as indicated by the exchange flow balance. This suggests that buyers are withdrawing Bitcoin to hold in cold storage.
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In conclusion, while the current market structure suggests further downside for Bitcoin, signs of accumulation and outflows indicate some bullish presence. Therefore, investors are advised to proceed with caution and stay informed of market trends.
