Key Points
- Bitcoin’s price experienced a correction after briefly reaching $61k.
- Increased selling pressure and bearish market trends contributed to the price drop.
Bitcoin’s price, after briefly touching $61k, experienced a correction. The cryptocurrency faced increased selling pressure within the last 24 hours.
Bitcoin Market Dynamics
Bitcoin managed to climb above $61k on August 20th. However, this bullish momentum was short-lived as bearish market forces soon took control. CoinMarketCap data reveals that Bitcoin’s price dropped by over 2.5% in the last 24 hours, with the coin trading around $59,378.99 at the time of writing.
Interestingly, this price correction was not unexpected. A popular crypto analyst, Ali, posted a tweet indicating a sell signal for Bitcoin. Shortly after this signal was revealed, the coin’s price experienced a correction.
Market Analysis
CryptoQuant’s data suggests several factors that may have influenced Bitcoin’s price drop. Notably, Bitcoin’s exchange reserve was on the rise, indicating an increase in selling pressure. This was further confirmed by Bitcoin’s exchange netflow, which also saw an increase.
Despite the increase in selling pressure, Bitcoin’s Coinbase Premium remained positive. This suggests that US investors maintained a dominant buying sentiment.
Glassnode’s data was analyzed to determine the likelihood of this bearish trend continuing. It was found that Bitcoin’s NVT ratio had significantly dropped, suggesting the asset is undervalued and hinting at a potential price increase.
However, conditions in the derivatives market did not favor buyers. Specifically, Bitcoin’s taker buy/sell ratio turned red, indicating a dominant selling sentiment in the futures market.
Technical indicators were also consulted to better understand market expectations. The MACD displayed a bullish crossover, while the Relative Strength Index (RSI) approached the neutral mark, signaling bullishness. However, the Chaikin Money Flow (CMF) registered a downtick, indicating a bearish trend.
