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July 17, 2024
PI Global Investments

Bitcoin Price at Risk of 15% Drop As Sellers Break Below 50-Day Support

Bitcoin Price Prediction: Bitcoin, the largest cryptocurrency in terms of market capitalization, experienced a sharp downturn over the week, plummeting from $49,000 to $40,300. This significant 17.8% drop can be linked to market concerns surrounding the spot BTC ETF being perceived as a ‘sell-the-news’ event, along with Grayscale’s ongoing liquidation of its Bitcoin holdings.

During this decline, sellers managed to break through the support trendline of the rising wedge pattern, suggesting that the Bitcoin price may be set for additional correction.

Reversal Pattern Signals a New Correction Trend in Action

  • A rising wedge pattern formation reflects the maturity of a recovery phase.
  • The BTC price above the 38.2% and 50% Fibonacci retracement level reflects the buyers having a firm grip on this asset.
  • The intraday trading volume in Bitcoin is $12.7 Billion, indicating a 52% loss.
Bitcoin Price| TradingView Chart

The recent two-month recovery in the Bitcoin price is characterized by the emergence of a rising wedge pattern on the charts. Typically, this pattern signals a potential final surge from buyers before the cryptocurrency undergoes a substantial correction. 

Additionally, the underwhelming performance of the BTC price, despite the launch of the First Spot BTC ETF, has led to a sense of demotivation and concern among investors. Consequently, on January 12th, there was a significant outflow from Bitcoin, resulting in a decisive break below the support of the wedge pattern.

This breakdown caused Bitcoin’s value to plummet to the 38.2% Fibonacci retracement level, with its price currently standing at $41,8. 

Should the selling pressure continue, there’s a possibility of the cryptocurrency’s value dropping by another 15%, potentially reaching a local support level of around $35,550.

Number Of Whales Surge At Bitcoin Price Dip

While the near-term projection for Bitcoin price seems bearish the on-chain activity reveals a notable development to strengthen the bullish outlook. Renowned cryptocurrency analyst Ali Martinez recently shared on the X platform that there has been a notable rise in the count of large-scale Bitcoin investors, commonly known as ‘whales’. The tweet stated:

Today marks a notable uptick in #Bitcoin whales! The number of addresses holding over 1,000 $BTC has reached its highest since August 2022, now totaling 1,510. 

This increase in large #BTC holders could signal strong confidence or strategic positioning in the market.

In line with this development, Should the BTC value maintain stability above the 50% Fibonacci Retracement level of around $37,200, it could significantly enhance the likelihood of a robust recovery by buyers.

  • Vortex Indicator: A bearish crossover between the VI+ and VI- slope reflects the correction trend remains in action
  • Exponential Moving Average: The coin price trading above the 100-and-200-day EMA indicates the overall trend is bullish.

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