Key Points
- Bitcoin’s price is nearing a crucial support level, hinting at a possible increase soon.
- Recent price correction is due to a rise in liquidation, pushing Bitcoin towards a critical support level.
Bitcoin [BTC] experienced a price correction within the last 24 hours, largely due to an increase in liquidation.
However, BTC is nearing a significant support level, which could lead to a trend reversal in the upcoming days or weeks.
Reason Behind Bitcoin’s Downtrend
Data from CoinMarketCap revealed that BTC’s value dropped by more than 3% in the last 24 hours.
BTC was trading at $60,862.71 with a market capitalization surpassing $1.2 trillion at the time of writing.
A tweet from a renowned crypto analyst, Ali, suggested that the increase in BTC’s liquidation near the $61,490 mark could be behind this downtrend.
This rise in liquidation often precedes a price correction, leading investors to exit their positions after reaching that level.
The recent price drop has pushed BTC towards a pivotal support level.
Analysis of the coin’s daily chart indicates a widening, falling wedge pattern.
If the downturn continues, BTC could potentially drop to $60,078.
However, at this point, BTC may have the opportunity to rebound, potentially gaining bullish momentum and reaching $71k in the coming weeks or months.
Potential for BTC Rebound
An examination of the king coin’s on-chain data indicates that the coin may be ready for a rebound.
Our analysis of Glassnode’s data revealed a bullish metric.
Notably, BTC’s Pi Cycle Top indicators suggest that BTC’s price is trading below its potential market bottom, indicating a possible bullish turn.
The Pi Cycle indicator comprises the 111-day moving average (111SMA) and a 2-times multiple of the 350-day moving average (350 SMA x 2) of Bitcoin’s price.
According to CryptoQuant’s data, BTC’s net deposit on exchanges was low compared to the last seven days’ average, indicating low selling pressure on BTC, which usually results in price upticks.
BTC’s Binary CDD was also in the green, suggesting that long-term holders’ movements in the last seven days were lower than average, indicating a motive to hold their coins.
The derivatives market also showed positive signs, with BTC’s Funding Rate rising.
Despite the Relative Strength Index (RSI) supporting the bears as it plummeted sharply at press time, the Chaikin Money Flow (CMF) registered a slight uptick, suggesting high chances of a price increase.
