Key Points
- Bitcoin’s value has dropped significantly, with a possible further decline to the $40,000 range.
- The liquidation volume of Bitcoin has reached its highest point since April.
Bitcoin [BTC] has seen a notable fall, plummeting below the $60,000 mark. Given the ongoing trend and the market’s unpredictability, a further drop to the $40,000 range could be on the horizon.
Bitcoin’s 24 Hour Decline
Bitcoin’s price trend analysis indicates a significant slump over the past 24 hours, with a drop of more than 9%. Bitcoin was trading at roughly $52,900, with its decline fluctuating between 8% and 9% in this timeframe.
Since the major decline began around August 2nd, Bitcoin has seen a considerable decrease in value, totaling over 24%.
Potential Future Movements
The Fibonacci retracement indicator was used to analyze Bitcoin’s price trend, providing useful insights into possible future movements. If BTC’s price manages to stay above the 23.6% retracement level, it could rise to test higher Fibonacci levels. The chart indicates it could specifically test the 38.2% level at approximately $56,847.56 or even the 50% level at about $59,127.13.
If the downward trend continues, the next crucial support, according to the Fibonacci retracement analysis, would be at the 0% level, around $49,467.88.
The Relative Strength Index (RSI) analysis indicates it is in oversold territory. This could suggest a forthcoming price reversal or bounce, as buyers might see it as an ideal time to enter the market.
However, during strong downtrends, the RSI can remain in the oversold zone for extended periods. The Moving Average Convergence Divergence (MACD), another momentum indicator, indicates bearish momentum. This suggests that the downtrend might continue in the short term, especially since the price is already below the 23.6% Fibonacci level.
Considering these factors—the bearish MACD, the oversold RSI, and Bitcoin’s positioning relative to key Fibonacci levels—the short-term outlook for Bitcoin seems to be bearish.
Bitcoin’s liquidation volume analysis on Coinglass showed a significant increase, marking its highest point since April. As of the close of trading on the 4th of August, the total BTC liquidation volume reached over $246 million.
A detailed look at these figures shows that most liquidations were long positions, totaling over $200 million. In contrast, short liquidations accounted for more than $46 million.
This considerable rise in liquidation volume, particularly in long positions, was a reaction to the sharp price movement that caught many traders by surprise. This likely triggered stop-loss orders or liquidating leveraged positions. The prevalence of long liquidations suggests that many traders were optimistic or bullish on BTC’s price, expecting upward movements that did not occur as anticipated.
