Bitcoin (BTC) has pulled back towards the middle of its trading range, sitting between $55,724 and $73,777, after bulls failed to maintain the price above the significant psychological resistance at $70,000. This retreat comes amid broader market uncertainty, with August’s historical performance offering little confidence to bullish traders. Data from CoinGlass indicates that August has averaged a meager 2.24% rise in Bitcoin prices since 2013.
The recent downturn in global equity markets, particularly the sharp 6% drop in Japan’s Nikkei index on August 1—the worst since the “Black Monday” crash of 1987—has cast a shadow over risk assets, including cryptocurrencies. Bitcoin’s $60,000 support level could come under serious pressure if the sell-off extends to the crypto markets. Despite near-term concerns, long-term optimism persists among analysts. Notably, popular analyst Willy Woo suggested in a recent post on X (formerly Twitter) that a mere 3% portfolio allocation by financial institutions could drive Bitcoin’s price to $700,000.
Technical Analysis: A Closer Look at Bitcoin’s Price Action
On August 1, Bitcoin’s bulls managed to defend the 50-day simple moving average (SMA) at $63,130, but they were unable to push the price above the 20-day exponential moving average (EMA) at $65,046. The selling pressure resumed on August 2, with bears attempting to sink the price below the 50-day SMA, a move that could signal the start of a deeper decline towards the critical psychological support at $60,000, and potentially as low as $55,724.
Traders are closely watching the $55,724 level, where buyers are expected to fiercely defend their positions. A sharp rebound from this level could lead to sideways trading for a while, with the next major move likely determined by whether Bitcoin breaks above $73,777 or drops below $55,724.
Also Read: Bitcoin ETF Market Heats Up – $50M Inflows, Grayscale’s Mini Fund Steals Show
Broader Market Impact and Altcoin Performance
Bitcoin’s struggles are also impacting the broader cryptocurrency market. Ethereum (ETH), for instance, failed to hold above its $3,080 support, raising the risk of a drop to $2,850. Binance Coin (BNB) is trading within a range, and a dip below $550 could open the door for further losses. Similarly, Solana (SOL) and Cardano (ADA) are facing crucial support levels, with potential downside risks if these levels are breached.
The ongoing uncertainty in both traditional and crypto markets highlights the fragility of Bitcoin’s current position. While the bulls have managed to defend key support levels so far, the next few days will be critical in determining whether Bitcoin can maintain its foothold or if further declines are on the horizon. As always, market participants should remain vigilant and prepared for volatility as Bitcoin navigates these turbulent times.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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