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Bitcoin price: Can it hit bottom and why?

19th Jun 24 10:25 am

The price of Bitcoin (BTC) is attempting to stabilize above the $65,000 level today, Wednesday. BTC seems to be supported by daily and weekly low zones, while other on-chain data indicates a significant decrease in Fear of Missing Out (FOMO) and a recent increase in selling liquidity. This suggests a potential move towards a bottom.

Notably, liquidation data from Coinglass provides insights into long and short positions that have been liquidated for traders, forced to close as the asset’s price moves against them. Over the past 24 hours, $72.60 million worth of Bitcoin has been liquidated, with $49.62 million coming from long positions.

This indicates a significant rise in selling liquidity and selling momentum, leading to the closure of most high-leverage long positions and the activation of a series of pending buy orders, allowing for entry into a large position with minimal reversal. In my opinion, this could help Bitcoin form a new price bottom.

I believe this week has been disappointing for Bitcoin’s price, which has fallen by 5.1%, forming a clear bearish candle on the weekly chart—a strong bearish engulfing candle starting at the upper boundary of a long-term rising wedge pattern extending from its all-time high of $73,845.

In my view, there could be more selling this week according to the daily chart. Generally, when Bitcoin’s market dominance declines, it opens up opportunities for other cryptocurrencies to gain traction and possibly outperform the major crypto asset. Bitcoin’s consolidation within the current price range over the past few weeks has led to a decline in its dominance.

However, once the price breaks out of this range, other cryptocurrencies might see a rise in performance. The anticipated rise in the cryptocurrency market may not occur in the short term.

I believe that as Bitcoin’s dominance struggles to exceed 58-60%, current market projections suggest a potential short to medium-term decline. This implies the market may experience further drops before the major recovery anticipated since the halving event.

From a fundamental perspective, the market shows a decline in demand for Bitcoin, significantly lowering its price. The Parabolic SAR indicator readings on the daily chart confirm a continuous price drop. This suggests a potential decline towards support between $60,000 and $55,000 before the significant recovery or rise, which might take years to occur. Therefore, long-term investments in Bitcoin are the most prudent strategy.

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